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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

	⌧	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934	
For the fiscal year ended December 31, 2020
or

	◻	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934	
For the transition period from           to         
Commission file number 001-33393

GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands		98-0439758	
State or other jurisdiction of
incorporation or organization		(I.R.S. Employer
Identification No.)	
299 Park Avenue, 12th Floor, New York, New York		10171	
(Address of principal executive offices)		 (Zip Code)	
Registrant’s telephone number, including area code: (646) 443-8550

Securities registered pursuant to Section 12(b) of the Act:

	
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
	
Common Stock, par value $.01 per share
	GNK	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ⌧
Indicated by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻ No ⌧
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻		Accelerated filer ⌧	
			
Non-accelerated filer  ◻		Smaller reporting company ⌧	
		Emerging growth company ◻	
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ◻ No ⌧
The aggregate market value of the registrant’s voting common equity held by non-affiliates of the registrant on the last business day of the registrant’s most recently completed second fiscal quarter, computed by reference to the last sale price of such stock of $6.28 per share as of June 30, 2020 was approximately $109.1 million. The registrant has no non-voting common equity issued and outstanding. The determination of affiliate status for purposes of this paragraph is not necessarily a conclusive determination for any other purpose.
The number of shares outstanding of the registrant's common stock as of February 24, 2021 was 41,801,753 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2020, are incorporated by reference in Part III herein.

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WEBSITE INFORMATION

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

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NOTE ABOUT FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements use words such as “anticipate,” “budget,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on our management’s current expectations and observations.  Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this annual report on Form 10-K are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xix) our financial results for the year ending December 31, 2021 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions, our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; (xxi) those other risks and uncertainties discussed below under the headings “RISK FACTORS RELATED TO OUR BUSINESS & OPERATIONS”, and (xxii) other factors listed from time to time in our filings with the Securities and Exchange Commission (the “SEC”).  Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I

ITEM 1. BUSINESS

OVERVIEW

General

We are a New York City-based company incorporated in the Marshall Islands in 2004.  We transport iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels.  After the sale of two of our Supramax vessels, our fleet will consist of 39 drybulk carriers, including 17 Capesize drybulk carriers, nine Ultramax drybulk carriers, and thirteen Supramax drybulk carriers with an aggregate carrying capacity of approximately 4,315,000 deadweight tons (“dwt”).  The average age of our current fleet is approximately 10.1 years.  All of the vessels in our fleet were built in shipyards with reputations for constructing high-quality vessels.  We seek to deploy our vessels on time charters, spot market voyage charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers. Of the vessels in our fleet, 27 are currently on spot market voyage charters, 13 are on fixed-rate time charter contracts and we are currently time chartering-in three third party vessels. 

See pages 3 - 4 for a table of our current fleet.

Genco’s approach towards fleet composition is to own a high-quality fleet of vessels that focuses primarily on Capesize, Ultramax and Supramax vessels. Capesize vessels represent our major bulk vessel category and the other vessel classes, including Ultramax, Supramax and Handysize vessels, represent our minor bulk vessel category. Our major bulk vessels are primarily used to transport iron ore and coal, while our minor bulk vessels are primarily used to transport grains, steel products and other drybulk cargoes such as cement, scrap, fertilizer, bauxite, nickel ore, salt and sugar. This approach of owning ships that transport both major and minor bulk commodities provide us with exposure to a wide range of drybulk trade flows. We employ an active commercial strategy which consists of a global team located in the U.S., Copenhagen and Singapore. Overall, our fleet deployment strategy remains weighted towards short-term fixtures, which provides us with optionality on our sizeable fleet.  In addition to both short and long-term time charters, we fix our vessels on spot market voyage charters as well as spot market-related time charters depending on market conditions and management’s outlook.

Our Operations

We report financial information and evaluate our operations by charter revenues and not by the length of ship employment for our customers, i.e., spot or time charters.  Each of our vessels serves the same type of customer, has similar operations and maintenance requirements, operates in the same regulatory environment, and is subject to similar economic characteristics. Based on this, we have determined that we operate in one reportable segment in which we are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. 

Our management team and our other employees are responsible for the commercial and strategic management of our fleet.  Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, spot market voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters.  Strategic management includes locating, purchasing, financing and selling vessels.  We currently contract with three independent technical managers to provide technical management of our fleet at a lower cost than we believe would be possible in-house.  Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.  Members of our New York City-based management team oversee the activities of our independent technical managers.

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AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements, and other documents with the SEC, under the Securities Exchange Act of 1934, or the Exchange Act.  The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC.  The public can obtain any documents that we file with the SEC at www.sec.gov.

In addition, our company website can be found on the Internet at www.gencoshipping.com.  The website contains information about us and our operations.  Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge after the reports and amendments are electronically filed with or furnished to the SEC.  To view the reports, access www.gencoshipping.com, click on Investor, then SEC Filings.  No information on our company website is incorporated by reference into this annual report on Form 10-K.

Any of the above documents can also be obtained in print by any shareholder upon request to our Investor Relations Department at the following address:

Corporate Investor Relations
Genco Shipping & Trading Limited
299 Park Avenue, 12th Floor
New York, NY 10171

BUSINESS STRATEGY

Our strategy is to manage and expand our fleet in a manner that maximizes our cash flows from operations.  To accomplish this objective, we intend to:

	●	Continue to operate a high-quality fleet — We intend to maintain a modern, high-quality fleet that meets or exceeds stringent industry standards and complies with charterer requirements through our technical managers’ rigorous and comprehensive maintenance program.  In addition, our technical managers maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea.	

	●	Utilize an active commercial strategy — Our current fleet of 41 drybulk vessels concentrates on the transportation of major and minor bulk commodities globally.  In 2017, the Company made a strategic decision to augment its existing in-house commercial operating platform shifting to an active commercial approach as compared to the previous tonnage provider model in order to improve margins and grow our network of customers. We expanded our presence globally with the establishment of offices in Singapore and Copenhagen in addition to our corporate headquarters in New York. As a result of this strategic shift, we have been fixing an increasing number of vessels on spot market voyage charters, where we provide a vessel for the transportation of goods between a load port and discharge port at a specified per-ton or on a lump sum basis, as well as on contracts of affreightment directly with cargo providers. We believe that our active platform provides added flexibility to changing market conditions and improves operational efficiencies within our owned fleet. Furthermore, we also assess arbitrage opportunities on cargoes through utilizing vessel positions by time chartering-in third party vessels and/or reletting cargo commitments on a voyage basis. In addition to these options, we continue to fix our vessels on both short and medium-term time charters, as well as spot market-related time charters, depending on market conditions and outlook. Overall, our fleet deployment strategy is currently weighted towards short-term fixtures which provide optionality for the Company. We continuously monitor the drybulk market and may in the future pursue other market opportunities for our vessels to capitalize on market conditions, including arranging longer charter periods and entering into vessel pools.	

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	●	Strategically expand the size of our fleet — We may acquire additional modern, high-quality, fuel-efficient drybulk vessels through timely and selective acquisitions in a manner that is accretive to our cash flows.  If we make such acquisitions, we may consider additional debt or equity financing alternatives.	

	●	Maintain low-cost, highly efficient operations — We currently outsource technical management of our fleet to Wallem Shipmanagement Limited (“Wallem”), Anglo-Eastern Group (“Anglo”) and Synergy Marine Group (“Synergy”), third party independent technical managers.  Our management team actively monitors and controls vessel operating expenses incurred by the independent technical managers by overseeing their activities.  We also seek to maintain low-cost, highly efficient operations by capitalizing on the cost savings and economies of scale that result from operating sister ships. Sister ships are ships of the same class that are of virtually identical design and are of similar size. In the future, we may explore opportunities to outsource to other third party independent technical managers, as well as providing in-house technical management for our vessels.	

	●	Capitalize on our management team’s reputation — We seek to capitalize on our management team’s reputation for high standards of performance, reliability and safety, and maintain strong relationships with major international charterers and cargo providers, many of whom consider the reputation of a vessel owner and operator when entering into time charters.  We believe that our management team’s track record improves our relationships with high quality shipyards and vendors, as well as financial institutions, many of which consider reputation to be an indicator of creditworthiness.	

OUR FLEET

The table below summarizes the characteristics of our vessels that have been delivered to us that are currently in our fleet:

Vessel	    	Class	    	Dwt	    	Year Built	 	
							 	
Genco Augustus	 	Capesize	 	180,151	 	2007		
Genco Claudius	 	Capesize	 	169,001	 	2010		
Genco Constantine	 	Capesize	 	180,183	 	2008		
Genco Commodus	 	Capesize	 	169,098	 	2009		
Genco Hadrian	 	Capesize	 	169,025	 	2008		
Genco London	 	Capesize	 	177,833	 	2007		
Genco Maximus	 	Capesize	 	169,025	 	2009		
Genco Tiberius	 	Capesize	 	175,874	 	2007		
Genco Tiger	 	Capesize	 	179,185	 	2011		
Genco Titus	 	Capesize	 	177,729	 	2007		
Baltic Bear	 	Capesize	 	177,717	 	2010		
Baltic Lion	 	Capesize	 	179,185	 	2012		
Baltic Wolf	 	Capesize	 	177,752	 	2010		
Genco Endeavour		Capesize		181,060		2015		
Genco Resolute		Capesize		181,060		2015		
Genco Defender		Capesize		180,021		2016		
Genco Liberty		Capesize		180,032		2016		
Baltic Hornet	 	Ultramax	 	63,574	 	2014		
Baltic Wasp	 	Ultramax	 	63,389	 	2015		
Baltic Scorpion	 	Ultramax	 	63,462	 	2015		
Baltic Mantis	 	Ultramax	 	63,470	 	2015		
Genco Weatherly		Ultramax		61,556		2014		
Genco Columbia		Ultramax		60,294		2016		
Genco Magic		Ultramax		63,446		2014		
Genco Vigilant		Ultramax		63,498		2015		
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Vessel	    	Class	    	Dwt	    	Year Built	 	
Genco Freedom		Ultramax		63,671		2015		
Genco Aquitaine	 	Supramax	 	57,981	 	2009		
Genco Ardennes	 	Supramax	 	58,018	 	2009		
Genco Auvergne	 	Supramax	 	58,020	 	2009		
Genco Bourgogne	 	Supramax	 	58,018	 	2010		
Genco Brittany	 	Supramax	 	58,018	 	2010		
Genco Hunter	 	Supramax	 	58,729	 	2007		
Genco Languedoc	 	Supramax	 	58,018	 	2010		
Genco Lorraine	 	Supramax	 	53,417	 	2009		
Genco Picardy	 	Supramax	 	55,257	 	2005		
Genco Predator	 	Supramax	 	55,407	 	2005		
Genco Provence	 	Supramax	 	55,317	 	2004		
Genco Pyrenees	 	Supramax	 	58,018	 	2010		
Genco Rhone	 	Supramax	 	58,018	 	2011		
Genco Warrior	 	Supramax	 	55,435	 	2005		
Baltic Leopard	 	Supramax	 	53,446	 	2009		

The following groups of sister ships are included in our current fleet except as noted below:

Group	Vessels	
1	Genco Constantine and Genco Augustus	
2	Baltic Lion and Genco Tiger	
3	Genco London, Baltic Wolf, Genco Titus and Baltic Bear	
4	Genco Commodus, Genco Hadrian, Genco Maximus and Genco Claudius	
5	Genco Resolute and Genco Endeavour	
6	Genco Liberty and Genco Defender	
7	Baltic Hornet, Baltic Mantis, Baltic Scorpion and Baltic Wasp	
8	Genco Auvergne, Genco Rhone, Genco Ardennes, Genco Aquitaine, Genco Brittany, Genco Languedoc, Genco Pyrenees and Genco Bourgogne	
9	Genco Warrior, Genco Predator, Genco Provence and Genco Picardy	
10	Baltic Cougar, Genco Lorraine, Baltic Panther and Baltic Leopard (1)	
11	Genco Spirt, Genco Mare, Genco Ocean, Baltic Cove and Genco Avra (2)	
12	Baltic Hare and Baltic Fox (3)	

	The Baltic Panther and the Baltic Cougar were sold on January 4, 2021 and February 24, 2021, respectively, and the sale of the Genco Lorraine and the Baltic Leopard are expected to be completed during the second quarter of 2021.	

	(2)	The Genco Ocean, the Baltic Cove, the Genco Spirit, the Genco Avra and the Genco Mare were sold on December 29, 2020, January 30, 2021, February 15, 2021, February 21, 2021 and February 24, 2021, respectively.	

	(3)	The Baltic Hare and the Baltic Fox were sold on January 15, 2021 and February 2, 2021, respectively.	

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FLEET MANAGEMENT

Our management team and other employees are responsible for the commercial and strategic management of our fleet.  Commercial management involves negotiating charters for vessels, managing the mix of various types of charters, such as time charters, spot market voyage charters, vessel pools and spot market-related time charters, and monitoring the performance of our vessels under their charters.  Strategic management involves locating, purchasing, financing and selling vessels.

We utilize the services of reputable independent technical managers, Wallem, Anglo and Synergy, for the technical management of our fleet.  Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.  Members of our New York City-based management team oversee the activities of our independent technical managers.  The head of our technical management team has over 30 years of experience in the shipping industry.

Wallem, founded in 1971, Anglo, founded in 1974, and Synergy, founded in 2006, are among the largest ship management companies in the world.  These technical managers are known worldwide for their agency networks, covering all major ports in China, Hong Kong, Japan, Vietnam, Taiwan, Thailand, Malaysia, Indonesia, the Philippines and Singapore.  These technical managers provide services to over 1,100 vessels of all types, including Capesize, Ultramax, Supramax and Handysize drybulk carriers that meet strict quality standards.

Under our technical management agreements, our technical manager is obligated to:

	●	provide personnel to supervise the maintenance and general efficiency of our vessels;	

	●	arrange and supervise the maintenance of our vessels to our standards to assure that our vessels comply with applicable national and international regulations and the requirements of our vessels’ classification societies;	

	●	select and train the crews for our vessels, including assuring that the crews have the correct certificates for the types of vessels on which they serve;	

	●	check the compliance of the crews’ licenses with the regulations of the vessels’ flag states and the International Maritime Organization, or IMO;	

	●	arrange the supply of spares and stores for our vessels; and	

	●	report expense transactions to us, and make its procurement and accounting systems available to us.	

OUR CHARTERS

As of February 23, 2021, we employed 27 of our vessels on spot market voyage charters where we provide a vessel for the transportation of goods between a load port and discharge port at a specified per-ton or on a lump sum basis. Under spot market voyage charters, voyage expenses such as fuel and port charges are borne by us. Additionally, as of February 23, 2021, we employed 13 of our vessels under fixed-rate time charters.  A time charter involves the hiring of a vessel from its owner for a period of time pursuant to a contract under which the vessel owner places its ship (including its crew and equipment) at the disposal of the charterer.  Under a time charter, the charterer periodically pays a fixed daily charterhire rate to the owner of the vessel and bears all voyage expenses, including the cost of bunkers (fuel), port expenses, agents’ fees and canal dues. Additionally, as of February 23, 2021, we were chartering in three third party vessels.

Our vessels operate worldwide within the trading limits imposed by our insurance terms.  The technical operation and navigation of the vessel at all times remains the responsibility of the vessel owner, which is generally responsible for the vessel’s operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.
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For the vessels that we employ on time charters or spot market-related time charters, agreements expire within a range of dates (for example, a minimum of 4 months and maximum of 6 months following delivery), with the exact end of the time charter left unspecified to account for the uncertainty of when a vessel will complete its final voyage under the time charter.  The charterer may extend the charter period by any time that the vessel is off-hire.  If a vessel remains off-hire for more than 30 consecutive days, the time charter may be cancelled at the charterer’s option.

In connection with the charter of each of our vessels, we incur commissions generally ranging from 1.25% to 6.25% of the total daily charterhire rate of each charter or total freight revenue to third parties, depending on the number of brokers involved with arranging the relevant charter.

We monitor developments in the drybulk shipping industry on a regular basis and strategically adjust the time and duration of employment for our vessels according to market conditions as they become available for hire.

The following table sets forth information about the current employment of the vessels in our fleet as of February 23, 2021:

	  	Year	  	Charter	  			
Vessel	    	Built	    	Expiration(1)	    	Cash Daily Rate(2)	 	
								
Capesize Vessels								
Genco Augustus	 	2007	 	March 2021	 	Voyage		
Genco Tiberius	 	2007	 	February 2021	 	Voyage		
Genco London	 	2007	 	April 2021		$11,600		
Genco Titus	 	2007	 	February 2021		Voyage		
Genco Constantine	 	2008	 	May 2021		Voyage		
Genco Hadrian	 	2008	 	March 2021		Voyage		
Genco Commodus	 	2009	 	March 2021		Voyage		
Genco Maximus	 	2009	 	March 2021		Voyage		
Genco Claudius	 	2010	 	March 2021		Voyage		
Genco Tiger	 	2011	 	March 2021		Voyage		
Baltic Lion	 	2012	 	March 2021		Voyage		
Baltic Bear	 	2010	 	February 2021		Voyage		
Baltic Wolf	 	2010	 	April 2021		Voyage		
Genco Resolute		2015		May 2021		Voyage		
Genco Endeavour		2015		May 2021		Voyage		
Genco Defender		2016		March 2021		Voyage		
Genco Liberty		2016		March 2021		Voyage		
								
Ultramax Vessels								
Baltic Hornet	 	2014	 	June 2021		$13,250		
Baltic Wasp	 	2015	 	April 2021		Voyage		
Baltic Scorpion	 	2015	 	April 2021		Voyage		
Baltic Mantis	 	2015	 	February 2021		$10,500		
Genco Weatherly		2014		February 2021		$12,750		
Genco Columbia		2016		March 2021		Voyage		
Genco Magic		2014		April 2021		$18,000		
Genco Vigilant		2015		June 2021		$10,000		
Genco Freedom		2015		-		-		
								
Supramax Vessels								
Genco Predator	 	2005	 	March 2021		Voyage		
Genco Warrior	 	2005	 	March 2021		$14,000		
Genco Hunter	 	2007	 	March 2021		$9,750		
Genco Lorraine	 	2009	 	March 2021		$13,500		
Genco Aquitaine	 	2009	 	April 2021		Voyage		
Genco Ardennes	 	2009	 	March 2021		Voyage		
Genco Auvergne	 	2009	 	March 2021		$8,400		
Genco Bourgogne	 	2010	 	March 2021		Voyage		
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	  	Year	  	Charter	  			
Vessel	    	Built	    	Expiration(1)	    	Cash Daily Rate(2)	 	
								
Genco Brittany	 	2010	 	April 2021		Voyage		
Genco Languedoc	 	2010	 	April 2021		$14,000		
Genco Picardy	 	2005	 	March 2021		Voyage		
Genco Provence	 	2004	 	March 2021		Voyage		
Genco Pyrenees	 	2010	 	March 2021		$8,500		
Genco Rhone	 	2011	 	February 2021		$25,000		
Baltic Leopard	 	2009	 	March 2021		Voyage		
(1)	The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of certain contracts, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire.	

(2)	Time charter rates presented are the gross daily charterhire rates before third party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues.	

CLASSIFICATION AND INSPECTION

All of our vessels have been certified as being “in class” by the American Bureau of Shipping (“ABS”), DNVGL or Lloyd’s Register of Shipping (“Lloyd’s”).  Each of these classification societies is a member of the International Association of Classification Societies.  Every commercial vessel’s hull and machinery is evaluated by a classification society authorized by its country of registry.  The classification society certifies that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel’s country of registry and the international conventions of which that country is a member.  Each vessel is inspected by a surveyor of the classification society in three surveys of varying frequency and thoroughness: every year for the annual survey, every two to three years for the intermediate survey and every four to five years for special surveys.  Special surveys always require drydocking.  Vessels that are 15 years old or older are required, as part of the intermediate survey process, to be drydocked every 24 to 36 months for inspection of the underwater portions of the vessel and for necessary repairs stemming from the inspection.

In addition to the classification inspections, many of our customers regularly inspect our vessels as a precondition to chartering them for voyages.  We believe that our well-maintained, high-quality vessels provide us with a competitive advantage in the current environment of increasing regulation and customer emphasis on quality.

We have implemented the International Safety Management Code, which was promulgated by the International Maritime Organization, or IMO (the United Nations agency for maritime safety and the prevention of marine pollution by ships), to establish pollution prevention requirements applicable to vessels.  We obtained documents of compliance and safety management certificates for all of our vessels, which are required by the IMO.

CREWING AND EMPLOYEES

Each of our vessels is crewed with 21 to 24 officers and seamen.  We do not provide any seaborne personnel to crew our vessels. Instead, our technical managers are responsible for locating and retaining qualified officers for our vessels.  The crewing agencies are responsible for each seaman’s training, travel and payroll and ensuring that all the seamen on our vessels have the qualifications and licenses required to comply with international regulations and shipping conventions.  Our vessels are typically manned with more crew members than are required by the country of the vessel’s flag in order to allow for the performance of routine maintenance duties.

We currently employ approximately 40 shore-based personnel, which includes personnel in our Singapore and Copenhagen offices. In addition, approximately 920 seagoing personnel are employed on our vessels.

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CUSTOMERS

Our assessment of a charterer’s financial condition and reliability is an important factor in negotiating employment for our vessels.  We generally charter our vessels to major trading houses (including commodities traders), major producers and government-owned entities rather than to more speculative or undercapitalized entities.  Our customers include national, regional and international companies, such as Rio Tinto Shipping (Asia) Pte. Ltd., Cargill International S.A., Gavilon Grain LLC, BHP, FMG International Pte Ltd, ADMIntermare, a division of ADM International Sarl, and Vale International S.A. For the year ended December 31, 2020, no customer accounted for more than 10% of our voyage revenue.

COMPETITION

Our business fluctuates in line with the main patterns of trade of the major drybulk cargoes and varies according to changes in the supply and demand for these items.  We operate in markets that are highly competitive and based primarily on supply and demand.  We compete for charters on the basis of price, vessel location and size, age and condition of the vessel, as well as on our reputation as an owner and operator.  We compete with other owners of drybulk carriers in the Capesize, Panamax, Ultramax, Supramax and Handysize class sectors, some of whom may also charter our vessels as customers.  Ownership of drybulk carriers is highly fragmented and is divided among approximately 2,200 independent drybulk carrier owners.

PERMITS AND AUTHORIZATIONS

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and other authorizations with respect to our vessels.  The kinds of permits, licenses, certificates and other authorizations required for each vessel depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel’s crew and the age of the vessel.  We believe that we have all material permits, licenses, certificates and other authorizations necessary for the conduct of our operations.  However, additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of our doing business.

INSURANCE

General

The operation of any drybulk vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy, hostilities and labor strikes.  In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade.  The United States (“U.S.”) Oil Pollution Act of 1990, or OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels trading in the U.S.-exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for ship owners and operators trading in the U.S. market.

While we maintain hull and machinery insurance, war risks insurance, protection and indemnity cover, and freight, demurrage and defense cover and loss of hire insurance for our fleet in amounts that we believe to be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level of coverage throughout a vessel’s useful life.  Furthermore, while we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates. Additionally, an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

Hull and Machinery, War Risks, Kidnap and Ransom Insurance

We maintain marine hull and machinery, war risks and kidnap and ransom insurance, which cover the risk of actual or constructive total loss for all of our vessels.  Our vessels are each covered up to at least fair market value with
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deductibles, which depend primarily on the class of the insured vessel and are subject to change.  We are covered, subject to limitations in our policy, to have the crew released in the case of kidnapping due to piracy in the Gulf of Aden off the coast of Somalia and the Gulf of Guinea.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, which insure our third party liabilities in connection with our shipping activities.  This includes third party liability and other related expenses resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal.  Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.” Subject to the “capping” discussed below, our coverage, except for pollution, is unlimited.

We maintain protection and indemnity insurance coverage for pollution of $1 billion per vessel per incident.  The 13 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities.  The International Group’s website states that the pool provides a mechanism for sharing all claims in excess of $10 million up to, currently, approximately $8.2 billion. We are a member of P&I Associations, which are members of the International Group. As a result, we are subject to calls payable to the associations based on the group’s claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Associations comprising the International Group.

Loss of Hire Insurance

We maintain loss of hire insurance, which covers business interruptions and related losses that result from the loss of use of a vessel.  Our loss of hire insurance has a 14-day deductible and provides claim coverage for up to 90 days.

ENVIRONMENTAL AND OTHER REGULATIONS
Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications, procurement of specialized fuels and implementation of certain operating procedures.
A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard (“USCG”), harbor master or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict our ability to comply and the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future
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serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.
As one of the largest drybulk shipping companies in the world, we recognize the need to operate a safe, responsible and sustainable business built for the long term. We regularly integrate Environmental, Social and Governance (ESG) practices into our operational and strategic decision making. As such, we aim to meet and, if possible and appropriate for our business, exceed minimum compliance levels set forth in rules and regulations governing the maritime industry, including certain rules and regulations described below.
Over the last several years, we have taken various steps to reduce our carbon footprint and improve the environment, including through investments made to our fleet. Specifically, we have:

	●	Purchased modern, fuel-efficient vessels with lower overall fuel consumption than older vessels in order to reduce our fleet’s greenhouse gas emissions;	
	●	Divested of certain older, less fuel-efficient vessels	
	●	22 of our vessels are outfitted with Energy Saving Devices (ESD) which are meant to reduce the fuel consumptions of these vessels. ESDs include Mewis Ducts, Fins and Propeller Boss Cap Fins.	
	●	Installed performance-monitoring systems on board 33 of our vessels to gather real-time fuel consumption data to optimize the voyage efficiency of these vessels;	
	●	Utilized a third-party data collection platform that analyzes information from our vessels in an effort to reduce fuel consumption, CO2 and greenhouse gas emissions;	
	●	Established and executed a compliance program regarding IMO 2020 fuel regulations (as described below);	
	●	Ballast water treatment systems are installed on 31 vessels in our current fleet, representing approximately 76% of our current fleet; and	
	●	Partnered with a third-party firm to conduct internal audits of our vessels with a goal of identifying areas of potential improvement on the daily maintenance and operation of our vessels in order to improve the quality of the services our vessels provide and to mitigate operational risks.	
	●	Installation of Engine Power Limitation (EPL) systems on certain major bulk vessels to increase the level of energy efficiency by ensuring the ship’s engine power is maintained within optimal levels.	

International Maritime Organization (IMO)
The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,” the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to drybulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; new emissions standards, titled IMO-2020, took effect on January 1, 2020.
In 2013, the IMO’s Marine Environmental Protection Committee, or the “MEPC,” adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or “CAS.” These amendments became effective on October 1, 2014, and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or “ESP Code,” which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments, which could be significant.
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Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited. We believe that all our vessels are currently compliant in all material respects with these regulations.
The MEPC adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems. Ships are now required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and took effect March 1, 2020, with the exception of vessels fitted with exhaust gas cleaning equipment (“scrubbers”) which can carry fuel of higher sulfur content. These regulations subject ocean-going vessels to stringent emissions controls, and may cause us to incur substantial costs, including those related to the purchase, installation and operation of scrubbers and the purchase of compliant fuel oil.
Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs. Certain ports in which our vessels call, including China and Singapore, are currently or may become subject to local regulations that impose stricter emission controls. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations. Refer to “Capital Expenditures” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and “We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures and affect our cash flows and net income and could subject us to increased liability under applicable law or regulation” in Item 1A. Risk Factors for further details of our plan for compliance and potential costs.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in 2010 and we are compliant with the Tier I and Tier II requirements for NOx emissions under the EPA standards and Annex VI. We do not currently own any vessels subject to the Tier III requirements, although we may acquire such vessels in the future. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.
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As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO intends to use such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans (“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. Additionally, MEPC 75 adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEI’s “phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships, and LNG carriers.
Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. These amendments introduce requirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbon intensity of international shipping. The requirements include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”), and (2) operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (“CII”). The attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set for ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual operational CII. Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content. The draft amendments introduced at MEPC 75 may be adopted at the MEPC 76 session, to be held during 2021.
We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills.  The Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. Our technical managers have valid documents
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of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendments that took effect on January 1, 2020, also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provision regarding IMO type 9 tank, (2) new abbreviations for segregations groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas.
The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
The IMO's Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for Ships Operating in Polar Water (the “Polar Code”). The Polar Code, which entered into force on January 1, 2017, covers design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution prevention as well as recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and after January 1, 2018, ships constructed before January 1, 2017 are required to meet the relevant requirements by the earlier of their first intermediate or renewal survey.
Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of such regulations is hard to predict at this time.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWM Convention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast water management certificate. ‌
On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation of ballast water management systems on such vessels at the first International Oil Pollution Prevention (IOPP) renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters.
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The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under these amendments, all ships must meet the D-2 standard by September 8, 2024. Costs of compliance with these regulations may be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention which would require a commissioning test of the ballast water management system for the initial survey or when performing an additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system certified under the BWM Convention. These amendments are expected to enter into force on June 1, 2022.
During the fourth quarter of 2018, we originally entered into agreements for the purchase of ballast water treatments systems for 36 of our vessels.  We have installed such systems on 18 vessels that were not already fitted with a ballast water treatment system upon purchase (excluding eight vessels that have been sold), and we expect the remaining ten to be installed by 2022. After the installation of these ballast water treatment systems, all of our vessels will be in compliance with these standards. The costs of compliance may be substantial and adversely affect our revenues and profitability.
Once mid-ocean ballast exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. The system specification requirements for trading in the U.S. have been formalized and we have been installing ballast water treatment systems on our vessels as their special survey deadlines come due. These ballast water treatment systems range in cost from $0.5 million to $0.9 million each, primarily dependent on the size of the vessel. Refer to “Capital Expenditures” section for further information.
The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in 2000 (the “CLC”). Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may be strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certain limits on liability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill is caused by the shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons covered by it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance for environmental incidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels are in possession of a CLC State issued certificate attesting that the required insurance coverage is in force.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation
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regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the CLC or the Bunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.
Anti-Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships, or the “Anti-fouling Convention.” The Anti-fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. The exteriors of vessels constructed prior to January 1, 2003 that have not been in drydock must, as of September 17, 2008, either not contain the prohibited compounds or have coatings applied to the vessel exterior that act as a barrier to the leaching of the prohibited compounds.  Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti-fouling System Certificate is issued for the first time; and subsequent surveys when the anti-fouling systems are altered or replaced.

In November 2020, MEPC 75 approved draft amendments to the Anti-fouling Convention to prohibit anti-fouling systems containing cybutryne, which amendments would apply to ships from January 1, 2023, or, for ships already bearing such an anti-fouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the last application to the ship of such a system. These amendments may be formally adopted at MEPC 76 in 2021.

We have obtained Anti-fouling System Certificates for all of our vessels that are subject to the Anti-fouling Convention.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
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Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel). OPA defines these other damages broadly to include:

i.		injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;	

ii.		injury to, or economic losses resulting from, the destruction of real and personal property;	

iii.		loss of subsistence use of natural resources that are injured, destroyed or lost;	

iv.		net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;	

v.		lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and	

vi.		net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.	

OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective November 12, 2019, the USCG adjusted the limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,200 per gross ton or $997,100 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives and statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxed certain environmental and safety
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protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of drilling operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. The effects of these changes and proposals are currently unknown, and recently, current U.S. President Biden signed an executive order temporarily blocking new leases for oil and gas drilling in federal waters. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.
OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.
While we do not carry oil as cargo, we do carry fuel and lube oil in our drybulk carriers. We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have a material adverse effect on our business, financial condition, and results of operations, cash flows, and ability to pay dividends.
Other United States Environmental Regulations
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. The CAA requires states to adopt State Implementation Plans, or SIPs, some of which regulate emissions resulting from vessel loading and unloading operations which may affect our vessels.
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of “waters of the United States.” The proposed rule was published in the Federal Register on February 14, 2019, and was subject to public comment. On October 22, 2019, the agencies published a final rule repealing the 2015 Rule defining “waters of the United States” and recodified the regulatory text that existed prior to the 2015 Rule. The final rule became effective on December 23, 2019. On January 23, 2020, the EPA published the “Navigable Waters Protection Rule,” which replaces the rule published on October 22, 2019, and redefines “waters of the United States.” This rule became effective on June 22, 2020, although the effective date has been stayed in at least one U.S. state pursuant to court order. The effect of this rule is currently unknown.
The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters.  The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and replaces the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast
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water management regulations adopted under the U.S. National Invasive Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters.  VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance, and enforcement regulations within two years of EPA’s promulgation of standards.  Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized.  Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA. By approximately 2022, the U.S. Coast Guard must develop corresponding implementation, compliance and enforcement regulations regarding ballast water. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.
European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.  Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses.  
The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. Regulations also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so-called “SOx-Emission Control Area”).  As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control are, use fuels with a 0.5% maximum sulfur content.
On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector in the European Union’s carbon market from 2022.  This will require shipowners to buy permits to cover these emissions.  Contingent on another formal approval vote, specific regulations are forthcoming and are expected to be proposed in 2021.
Greenhouse Gas Regulation
Our industry currently is heavily dependent on the consumption of fossil fuels, which has been linked by certain experts to greenhouse gas emissions and the warming of the global climate system. We are committed to working to reduce our carbon footprint, including by transitioning to low-carbon fuels while continuing to deliver for our customers.
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Our governance, strategy, risk management and performance monitoring efforts with respect to managing this challenge continue to evolve.
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, former U.S. President Trump announced that the United States intends to withdraw from the Paris Agreement and the withdrawal became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to rejoin the Paris Agreement. It will take 30 days for the United States to rejoin.
At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause us to incur additional substantial expenses.
The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collect and publish data on carbon dioxide emissions and other information. As noted above, regulations relating to the inclusion of greenhouse gas emissions from the maritime sector in the European Union’s carbon market are also forthcoming.
In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executive order to review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions, and in August 2019, the Administration announced plans to weaken regulations for methane emissions. Further, on August 13, 2020, the EPA released rules rolling back standards to control methane and volatile organic compound emissions from new oil and gas facilities. However, U.S. President Biden recently directed the EPA to publish a proposed rule suspending, revising, or rescinding certain of the rules issued by the EPA under the prior administration. The EPA or individual U.S. states could enact environmental regulations that would affect our operations.
Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or certain weather events.
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International Labour Organization
The International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in international voyages or flying the flag of a Member and operating from a port, or between ports, in another country.  We believe that all of our vessels are in substantial compliance with and are certified to meet MLC 2006.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.
Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship and Port Facility Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements.
The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area, as well as off the coast of Western Africa. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.
Inspection by Classification Societies

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,” which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a level of consistency between IACS Societies. All of our vessels are
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certified as being “in class” by all the applicable Classification Societies (American Bureau of Shipping, DNVGL, or Lloyd's Register of Shipping). All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard agreements.
A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be surveyed every 30 to 36 months for inspection of the underwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.
SEASONALITY

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, freight and charter rates.  We may seek to mitigate the risk of these seasonal variations by entering into long-term time charters for certain of our vessels, where possible.  However, this seasonality may result in quarter-to-quarter volatility in our operating results, depending on when we enter into our time charters or if our vessels trade on the spot market.  The drybulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and raw materials in the northern hemisphere during the winter months.  As a result, our revenues could be weaker during the fiscal quarters ended June 30 and September 30, and conversely, our revenues could be stronger during the quarters ended December 31 and March 31.

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ITEM 1A. RISK FACTORS

The following risk factors and other information included in this report should be carefully considered.  If any of the following risks actually occur, our business, financial condition, operating results or cash flows could be materially and adversely affected, and the trading price of our common stock could decline.

RISK FACTORS RELATED TO OUR BUSINESS AND OPERATIONS

Industry Specific Risk Factors

The COVID-19 pandemic and measures to contain its spread have impacted the markets in which we operate and could have a material adverse impact on our business and its operations.

The COVID-19 pandemic and measures to contain it have negatively impacted regional and global economies and trade patterns in markets in which we operate, the way we operate our business, and the businesses of our charterers and suppliers. These negative impacts could continue or worsen, even after the pandemic diminishes or ends. The pandemic may have far-reaching repercussions on our business and industry that are currently unknown. Governments in affected countries have imposed or reimposed travel bans, quarantines, and other emergency public health measures, and some have implemented lockdown measures. Companies, including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while some other businesses have been required to close entirely. The pandemic resulted in reduced industrial activity in China on which our business substantially depends, with temporary closures of factories and other facilities.  Economic activity has also declined in other major industrial and financial centers, including the U.S., the E.U., Japan, India, South Korea and Brazil. Deterioration of worldwide, regional, or national economic conditions and activity could result in further reduced demand for drybulk cargoes and shipping services and may also negatively affect our charters, suppliers, and other parties with which we do business.

We also face significant risks to our personnel and operations due to the pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports in which COVID-19 cases have been reported. Our shore-based personnel likewise face such exposure risk, as we are headquartered in New York, an area that has been severely impacted by COVID-19. Ongoing disruption of normal business activities due to COVID-19 and the imposition of measures against its spread may result in severe operational disruptions and delays. Measures against COVID-19 in a number of countries have restricted crew rotations on our vessels, which may continue or become more severe. We have experienced and may continue to experience disruptions to our normal vessel operations caused by increased deviation time from positioning our vessels where we can undertake a crew rotation. Delays in crew rotations have led to crew fatigue and may continue to do so, which may result in delays or other operational issues.

Restrictions on crew rotations resulting from measures against COVID-19 pose risks to our financial condition and liquidity in a number of ways. As crew members worldwide have exceeded the duration of their contracts in many cases, including on certain of our vessels, there is increased urgency to work towards completing more crew rotations in the coming months. Accordingly, we have had and expect to continue to have increased expenses due to incremental fuel consumption and days in which our vessels are unable to earn revenue in order to deviate to certain ports on which we would not call during a typical voyage. We have and may continue to incur additional expenses associated with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to perform crew rotations in the current environment. Delays in crew rotations have also caused us to incur additional costs related to crew bonuses paid to retain the existing crew members on board and may continue to do so. Some ports reimposed restrictions that may affect crew rotations from the beginning of this year which may continue through at least the first half of 2021, depending on worldwide availability of the vaccine.

Moreover, COVID-19 and measures against it have led to a highly difficult environment in which to dispose of vessels. The ability and willingness of potential buyers to consummate vessel transactions has been limited as a result of general economic conditions, the availability of financing, and their ability to inspect vessels. Constraints regarding crew changes have caused us to incur additional expenses and waiting time that has reduced earnings from our vessels in order to comply with agreements for the disposition of certain of our vessels. These conditions may continue, and we
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may be unable to comply with such terms at all. As a result of the foregoing, we may therefore experience a material adverse impact on our financial condition, compliance with our credit facility covenants, and ability to pay dividends.

Our credit facilities contain collateral maintenance covenants that require the aggregate appraised value of collateral vessels to be at least 135% of the principal amount of the loan outstanding under each such facility. If the values of our vessels were to decline further significantly as a result of COVID-19 or otherwise, we may not satisfy this covenant. Outstanding borrowings under our revolving credit facility, which total $21.2 million as of December 31, 2020, may make it more difficult to satisfy the collateral maintenance requirement under our $133 Million Credit Facility. If we do not satisfy it, we will need to post additional collateral or prepay outstanding loans to bring us back into compliance, or we will need to seek waivers, which may not be available or may be subject to conditions.

We also reduced our quarterly dividend to $0.02 per share in order to maintain our cash reserves.  Our credit facilities permit the payment of dividends to the extent our unrestricted cash and cash equivalents are greater than $100 million and 18.75% of our total indebtedness, whichever is higher (or a specified percentage of consolidated net income for the preceding quarter).  As of December 31, 2020, we had cash for this purpose of $143.9 million. We have commitments for amortization payments of $20.2 million per quarter under our credit facilities. Therefore, if we do not generate cash flow from operations, we would be unlikely to be able to declare or pay dividends in the future, except to the extent of permissible dividends from net income. 

A downturn in the global economic environment may negatively impact our business.

If the current global economic environment worsens or does not sufficiently recover, we may be negatively affected in a number of ways.

As a result of low freight and charter rates that in some instances do not allow us to operate our vessels profitably, our earnings and cash flows could decline. Continuation of these conditions for a prolonged period may leave us with insufficient cash resources for our operations or make required debt repayments under our credit facilities, which would potentially accelerate the repayment of our outstanding indebtedness.

If our earnings and cash flows decline for a prolonged period, we may also breach one or more of our credit facility covenants, such as those relating to our minimum cash balance, collateral maintenance, or minimum working capital. This also would potentially accelerate the repayment of outstanding indebtedness. Additionally, our charterers may fail to meet their obligations under our time charter and freight agreements.

A significant number of our vessels’ port calls involve loading or discharging raw materials and semi-finished products in the Asia Pacific region.  As a result, a negative change in economic conditions in any Asia Pacific country, particularly in China, India, or Japan, could adversely affect our business. In recent years, China has been one of the world’s fastest growing economies in terms of gross domestic product.  To the extent the Chinese government does not pursue economic growth and urbanization, including infrastructure stimulus spending, the level of imports to and exports from China could be adversely affected, as well as by changes in political, economic and social conditions or other Chinese government policies.  The Chinese government may adopt policies that favor domestic drybulk shipping companies and may hinder our ability to compete with them effectively.  The Chinese government has also taken actions seen as protecting domestic industries such as coal or steel, which may reduce the demand for China-bound drybulk cargoes and negatively impact the drybulk industry. Moreover, a significant or protracted slowdown in the economies of the U.S., the European Union or various Asian countries may adversely affect economic growth in China and elsewhere. 

Any increased trade barriers or restrictions, especially involving China, could adversely impact global economic conditions and, as a result, the amount of cargo transported on drybulk vessels.  As an example of such restrictions, and most notable in term of drybulk trade volumes, China imposed tariffs on U.S. soybean exports in 2019 as part of the U.S.-China trade dispute. A deterioration in the trading relationship or a re-escalation of protectionist measures taken between these countries or others could lead to reduced drybulk trade volumes.

Freight and charterhire rates for drybulk carriers could remain low from a historical perspective or further decrease in the future, which may adversely affect our earnings.
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A prolonged downturn in the drybulk charter market, from which we derive the large majority of our revenues, has severely affected the drybulk shipping industry for several years. The Baltic Dry Index (“BDI”), an index published by The Baltic Exchange of shipping rates for key drybulk routes, declined in 2020, principally as a result of the global economic slowdown caused by the COVID-19 pandemic.

Shipping capacity supply and demand strongly influences freight rates. Factors that influence demand for vessel capacity include demand for and production of drybulk products; global and regional economic and political conditions, including developments in international trade, fluctuations in industrial and agricultural production and armed conflicts; the distance drybulk cargo is to be moved by sea; environmental and other regulatory developments; events impacting production of the commodities that we carry; and changes in seaborne and other transportation patterns. Factors that influence the supply of vessel capacity include the number of newbuilding deliveries; port and canal congestion; scrapping of older vessels; vessel casualties; conversion of vessels to other uses; the number of vessels out of service (laid-up, drydocked, awaiting repairs or otherwise not available for hire); and environmental concerns and regulations.

In addition to prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of fuel and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. 

Adverse economic, political, social or other developments, including a change in worldwide fleet capacity, could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.

Although vessel supply growth rates have slowed in recent years, if the supply of newbuilding vessels outpaces the demand for vessels, it could negatively impact freight rates and charterhire rates. If market conditions deteriorate following our vessels’ current employment, we may not be able to employ our vessels at profitable rates or at all.  The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.

Prolonged declines in freight and charter rates, changes in the useful life of vessels, and other market deterioration could cause us to incur impairment charges.

We evaluate the carrying amounts of our vessels to determine if events have occurred that would require us to evaluate our vessels for an impairment of their carrying amounts. The recoverable amount of vessels is reviewed based on events and changes in circumstances that would indicate that the carrying amount of the assets might not be recovered. The review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires us to make various estimates including future freight rates and earnings from the vessels. All of these items have been historically volatile.

We determine each vessel’s recoverable amount by estimating the vessel’s undiscounted future cash flows. If the recoverable amount is less than the vessel’s carrying amount, the vessel is deemed impaired and written down to its fair market value. Our vessels’ carrying values may not represent their fair market value because market prices of secondhand vessels tend to fluctuate with freight and charter rate changes and the cost of newbuildings. Any impairment charges incurred as a result of declines in freight and charter rates could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.

We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures or subject us to increased liability.

Governments regulate our business and vessel operations through international conventions and national, state and local laws and regulations. Various governmental and quasi-governmental agencies require us to obtain permits, licenses, certificates, and financial assurances regarding our operations. Given frequent regulatory changes, we cannot
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predict their effect on our ability to do business, the cost of complying with them, or their impact on vessels’ useful lives or resale value. Our failure to comply with any such conventions, laws, or regulations could cause us to incur substantial liability.  See “Overview — Environmental and Other Regulation” in Item 1, “Business” of this annual report.

Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination.  Inspection procedures can result in the seizure of the contents of our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us. Changes to inspection procedures could impose additional financial and legal obligations on us.  Such changes could also impose additional costs and obligations on our customers and may render the shipment of certain types of cargo uneconomical or impractical.  Any such changes or developments may have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Our vessels are exposed to international risks that could reduce revenue or increase expenses.

Our vessels are at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather.  All these can result in death or injury to persons, repair and other increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, damage to our customer relationships, harm to our reputation as a safe and reliable operator and delay or rerouting.  Public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, could adversely impact our and our customers’ operations. Changing economic, regulatory and political conditions, including political and military conflicts, have resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts.  Our vessels may operate in dangerous areas, including areas of the South China Sea, the Arabian Sea, the Indian Ocean, the Gulf of Aden off the coast of Somalia, the Gulf of Guinea, and the Red Sea.  In November 2013, the Chinese government announced an Air Defense Identification Zone (ADIZ) covering much of the East China Sea. A number of nations do not honor the ADIZ, which includes certain maritime areas that have been contested among various nations in the region. Tensions relating to the Chinese ADIZ or other territorial disputes may escalate and result in interference with shipping routes or in market disruptions. Any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Our vessels may suffer damage, resulting in unexpected drydocking costs.

If our vessels suffer damage, they may need to be repaired at a drydocking facility for substantial and unpredictable costs that may not be fully covered by insurance.  Space at drydocking facilities is sometimes limited, and not all drydocking facilities are conveniently located.  The loss of earnings while our vessels are not operable could negatively impact our business, results of operations, cash flows, financial condition and ability to pay dividends.

The operation of drybulk vessels has certain unique operational risks which could affect our earnings and cash flow.

A drybulk vessel’s cargo and its interaction with the vessel can be an operational risk.  By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure.  Drybulk vessels are often subjected to battering treatment that may damage the vessel during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers.  Vessels so damaged may be more susceptible to hull breaches, which may lead to the flooding of the vessels’ holds.  This may cause the bulk cargo to become so dense and waterlogged that its pressure buckles the vessel’s bulkheads, leading to the loss of a vessel.  If we are unable to adequately maintain our vessels, we may be unable to prevent these events.  Any of these circumstances or events may have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.  In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Acts of piracy on ocean-going vessels have continued and could adversely affect our business.

Acts of piracy have historically affected vessels trading in such regions as the South China Sea, the Arabian Sea, the Indian Ocean, the Gulf of Aden off the coast of Somalia, the Gulf of Guinea, and the Red Sea.  Piracy incidents
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continue to occur particularly in the Gulf of Aden, the Gulf of Guinea and increasingly in Southeast Asia. Our vessels could be subject to detention hijacking as a result of acts of piracy, rendering our vessels unable to perform their charters and earn revenues. Moreover, if these piracy attacks result in regions characterized by insurers as “war risk” zones, or Joint War Committee (JWC) “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain, if available at all.  In addition, crew costs, including costs that may be incurred to the extent we employ onboard security guards, could increase in such circumstances.  We may not be adequately insured to cover losses from these incidents. The occurrence of any of any of the foregoing could have a material adverse impact on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

In response to piracy incidents, following consultation with regulatory authorities, we may station guards on some of our vessels. This may increase our risk of liability for death or injury to persons or damage to personal property, and we may not have adequate insurance in place to cover such liability.

Terrorist attacks and other acts of violence or war may have an adverse effect on our business.

Terrorist attacks continue to cause uncertainty in the world’s financial markets and may affect our business. Continuing conflicts and recent developments in the Middle East and the presence of U.S. and other armed forces in the Middle East and Afghanistan may lead to additional acts of terrorism and armed conflict, which may contribute to further economic instability. Following the U.S.’ withdrawal from the Joint Comprehensive Plan of Action agreed to on July 14, 2015 regarding the Iranian nuclear program, tensions have been rising between Iran on the one hand and the U.S. and its allies on the other.  As our vessels transit the Arabian Gulf from time to time, they may face increased risk of damage or seizure. Political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Any of these occurrences could have a material adverse impact on our business, results of operation, financial condition, and ability to pay dividends.

Compliance with safety and other vessel requirements imposed by classification societies may be costly and could reduce our net cash flows and net income.

The hull and machinery of commercial vessels must be certified as being “in class” by a classification society authorized by its country of registry and undergo annual surveys, intermediate surveys and special surveys as described in Item 1., “Business – Classification and Inspection” in this report. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and unemployable, and we could be in violation of certain covenants in our credit facilities, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

If our vessels call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our common shares.

All of our charters with customers prohibit our vessels from entering any countries or conducting any trade prohibited by the U.S. However, on such customers’ instructions, our vessels could call on ports in countries subject to sanctions or embargoes imposed by the U.S. government or countries identified by the U.S. government as state sponsors of terrorism, such as Iran, Sudan and Syria. Any violation of sanctions and embargo laws and regulations could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. Additionally, some investors may decide to divest their interest, or not to invest, in us simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. War, terrorism, civil unrest and governmental actions in these and surrounding countries may adversely affect investor perception of the value of our common stock.

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We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act, UK Bribery Act, and other applicable worldwide anti-corruption laws.

The U.S. Foreign Corrupt Practices Act (“FCPA”) and other applicable worldwide anti-corruption laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business.  These laws include the U.K. Bribery Act, which is broader in scope than the FCPA, as it contains no facilitating payments exception.  We charter our vessels into some jurisdictions that international monitoring groups have identified as having high levels of corruption.  Our activities create the risk of unauthorized payments or offers of payments by our employees or agents that could violate the FCPA or other applicable anti-corruption laws.  Our policies mandate compliance with applicable anti-corruption laws.  If we violate the FCPA or other applicable anti-corruption laws, we could suffer from civil and criminal penalties or other sanctions.

We may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business.

Our success largely depends on attracting and retaining highly skilled and qualified personnel.  In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work.  Competition to attract and retain qualified crew members is intense.  Any inability our third party technical managers or we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Labor interruptions could disrupt our business.

Our vessels are manned by masters, officers and crews employed by third parties.  If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our normal operations and could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

Our vessels sometimes call in ports in South America and other areas where smugglers attempt to hide drugs and other contraband on vessels.  To the extent our vessels are found with contraband, whether inside or attached to the hull and regardless of our crew’s knowledge, we may face governmental or other regulatory claims, which could have an adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Arrests of our vessels by maritime claimants could cause a significant loss of earnings for the related off-hire period.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages.  In many jurisdictions, a maritime lienholder may enforce its lien by arresting or attaching a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could result in a significant loss of earnings for the related off-hire period.  In addition, in jurisdictions where the “sister ship” theory of liability applies, a claimant may arrest the vessel subject to the claimant’s maritime lien and any associated vessel, which is any vessel owned or controlled by the same owner. 

Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.

A government of a vessel’s registry could requisition for title or seize our vessels.  A government could also requisition our vessels for hire, becoming the charterer at dictated charter rates.  Generally, requisitions occur during a period of war or emergency.  Such requisitioning of one or more of our vessels could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

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Changes in fuel prices could adversely affect our profits.

We operate a large portion of our vessels on spot market voyage charters, which generally require the vessel owner to bear the cost of fuel in the form of bunkers, a significant operating expense.  Depending on the timing of increases in the price of fuel and market conditions, we may be unable to pass along fuel price increases to our customers.  In standard time charter arrangements, under which the balance of our vessels operate, the charterer bears the cost of fuel bunkers.  At the commencement of a charter, the charterer purchases fuel from us at then-prevailing market rates, and we must repurchase fuel at that same initial rate when the charterer redelivers the vessel to us. Market rates at the time the charterer redelivers the vessel may be more or less than the prevailing market rates at the commencement of the charter.  In certain of our short-term time charter agreements, we sell the charterer the amount of the bunkers actually consumed and the charterer is required to redeliver the vessel to us without replenishment of the bunkers consumed. The date of redelivery of vessels and fluctuations in the price and supply of fuel are unpredictable, and therefore, these arrangements could result in losses or reductions in working capital that are beyond our control.

As part of our approach to comply with IMO regulations that limit sulfur emissions, we have retrofitted our 17 Capesize vessels with scrubbers. The performance of our investment in scrubbers depends in part upon the fuel spread between compliant low sulfur fuel and high sulfur fuel. Any decrease in the spread between these two fuel types could lengthen the anticipated payback period for this investment. In addition, certain countries have imposed regulations regarding the operations of scrubbers. These restrictions could become more restrictive or widespread, and we may be further limited in or prevented from operating scrubbers on our vessels as a result. See “General – IMO 2020 Compliance” in Item 7, Management’s Discussion and Analysis of Financial Condition for further details. To the extent we cannot operate scrubbers on our vessels, we would no longer be able to recover our investment in scrubbers and would have to use low sulfur fuel instead. Low sulfur fuel, which we currently use in our minor bulk fleet is more expensive than standard marine fuel. Increased demand for low sulfur fuel has resulted in an increase in prices for such fuel and may result in further increases, which we may not be able to include in our freight rates.

To mitigate the risk associated with fuel price increases, we may enter into forward bunker contracts from time to time that permit us to purchase fuel at a fixed price in exchange for payment of a certain amount. We may incur a loss on such contracts if the price of fuel declines below the price at which the contract permits us to purchase fuel, or a significant increase in the price of fuel may not be mitigated by our entry into any such contracts. Either occurrence could have a material adverse effect on our business, financial condition, and results of operations, cash flows, and ability to pay dividends.

Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, freight and charter rates.  This seasonality may result in quarterly volatility in our operating results, depending on when and whether we enter into time charters or trade on the spot market.  The drybulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and raw materials in the northern hemisphere during the winter months.  As a result, our revenues could be weaker during the fiscal quarters ended June 30 and September 30, and conversely, our revenue could be stronger during the quarters ended December 31 and March 31.  This seasonality could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Company Specific Risk Factors

We may face liquidity issues if conditions in the drybulk market worsen for a prolonged period.

While supply and demand fundamentals have improved starting in 2017, persistent, historically low rates prior to 2017 in the drybulk shipping market resulted in decreases in our prior period revenues. As a result, we experienced negative cash flows, and in turn, our liquidity was negatively impacted. If the market environment declines over a prolonged period of time, we may have insufficient liquidity to fund ongoing operations or satisfy our obligations under our credit facilities, which may lead to a default under one or more of our credit facilities.

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If we are in default of any of our credit facilities, the repayment of our indebtedness under the relevant facility could potentially be accelerated. In addition, each of our credit facilities contain cross default provisions that could be triggered by a default under any of our other credit facilities, with the result that the repayment of some or all of our indebtedness could potentially be accelerated.

As a result, we could experience a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and we may cease to continue as a going concern. For a further discussion of our liquidity issues, see “Liquidity and Capital Resources” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” below.

The market values of our vessels may decrease, which could adversely affect our operating results.

If the book value of one of our vessels is impaired due to unfavorable market conditions or a vessel is sold at a price below its book value, we would incur a loss that could adversely affect our financial results.  See “Impairment of long-lived assets” section under the heading “Critical Accounting Policies” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Our earnings and our ability to pay dividends will be adversely affected if we do not successfully employ our vessels.

The charterhire rates for our vessels have sometimes declined below the operating costs of our vessels.  Because we currently charter most of our vessels on spot market voyage charters and spot market-related time charters, we are exposed to the cyclicality and volatility of the spot charter market, and we do not have significant long-term, fixed-rate time charters to ameliorate the adverse effects of downturns in the spot market. Capesize vessels, which we operate as part of our fleet, have been particularly susceptible to significant freight rate fluctuations in spot charter rates.

Spot market voyage charter rates may fluctuate dramatically based primarily on the worldwide supply of drybulk vessels and the worldwide demand for transportation of drybulk cargoes.  Future freight rates and charterhire rates may not enable us to operate our vessels profitably.  Further, our standard time charter contracts with our customers specify certain performance parameters that can result in customer claims if not met.  Such claims may have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

To the extent our vessels undertake spot market voyages, we face operational risks from responsibility for delays in delivery of the cargo, which may be due to weather, vessel breakdown, port congestion, or other factors that may be beyond our control. Such delays can result in customer claims. In addition, spot market voyages require us to make payments directly to third parties that our charters would ordinarily make. Such arrangements carry a risk of disputes and fraud by third parties. As a result of any of these circumstances, we may experience a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

In addition, while we try to capture arbitrage opportunities by taking cargo positions, a significant fluctuation in the rate environment could adversely affect profitability.

Restrictive covenants under our credit facilities may restrict our growth and operations.

Our credit facilities impose operating and financial restrictions that may limit our ability to utilize cash above a certain amount; incur additional indebtedness on satisfactory terms or at all; incur liens on our assets; sell our vessels or the capital stock of our subsidiaries; make investments; engage in mergers or acquisitions; pay dividends; make capital expenditures; compete effectively or change management arrangements relating to any of our vessels. Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions, which we may not be able to obtain when needed. This may prevent us from taking actions that are in our best interest and from executing our business strategy of growth and may restrict or limit our ability to pay dividends and finance our future operations.

We depend upon ten charterers for a large part of our revenues.  The loss of any significant customers could adversely affect our financial performance.
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For the year ended December 31, 2020, approximately 40% of our revenues were derived from ten charterers.  While we are seeking to expand customer relationships with cargo providers, this may not sufficiently diversify our customer base to mitigate this risk. If we were to lose any of our major customers or if any of them significantly reduced use of our services or were unable to make payments to us, it could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

The aging of our fleet and our practice of purchasing and operating previously owned vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings.

The majority of our drybulk carriers were previously owned by third parties.  We may seek additional growth by acquiring previously owned vessels.  The pre-inspection of such vessels does not provide us with the same knowledge about their condition that we would have had if these vessels had been built for and operated exclusively by us.  We may not detect all defects or problems before purchase.  Any such defects or problems may be expensive to repair, and if not timely detected, may result in accidents or other incidents for which we may become liable.  Also, we do not receive the benefit of any builder warranties if the vessels we buy are older than one year.

The costs to maintain a vessel in good operating condition generally increase with its age. Older vessels are typically less fuel efficient than newer ones due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. We may not be able to incur borrowings on favorable terms or at all to fund the cost of maintaining our vessels.

Governmental regulations and safety and other equipment standards related to vessel age may require expenditures for vessel equipment and restrict our vessels’ activities. Market conditions may not justify such expenditures or enable us to operate our vessels profitably.  As a result, regulations and standards could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

An increase in interest rates could adversely affect our cash flow and financial condition.

We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding. Moreover, in the recent past, concerns have been publicized that some of the member banks surveyed by the British Bankers’ Association (“BBA”) in connection with the calculation of LIBOR may have been underreporting or otherwise manipulating the inter-bank lending rate applicable to them. A number of BBA member banks entered into settlements with their regulators and law enforcement agencies with respect to alleged LIBOR manipulation, and investigations by regulators and governmental authorities in various jurisdictions are ongoing. In addition, on July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. If LIBOR or any alternative reference rate were to increase significantly, the amount of interest payable on our outstanding indebtedness could increase significantly and could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

We depend to a significant degree upon third party managers to provide the technical management of our fleet. 

We have contracted the technical management of our fleet, including crewing, maintenance, and repair services, to third party technical management companies.  The failure of these technical managers to perform their obligations could materially and adversely affect our business, results of operations, cash flows, financial condition and ability to pay dividends.  Although we may have rights against our third party managers if they default on their obligations to us, our shareholders will share that recourse only indirectly to the extent that we recover funds.

We may not be able to compete for charters with new entrants or established companies with greater resources in the drybulk industry.

We employ our vessels in a highly competitive, capital intensive, and fragmented market. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than ours.  Competition for the
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transportation of drybulk cargoes can be intense and depends on price, location, size, age, condition and the acceptability of the vessel and its managers to the charterers.  Competitors with greater resources could enter and operate larger and better fleets that offer better prices than ours.

Future dividends are subject to the discretion of our Board of Directors; dividends and share repurchases are limited under our credit facilities.

Our declaration and payment of dividends is subject to legally available funds, compliance with law and contractual obligations and our Board of Directors’ determination that each declaration and payment is in the best interest of the Company and our shareholders.  Our policy may change in the future, and we have no legal obligation to continue paying dividends at the same rate or at all.

Under the terms of our credit facilities, our payment of dividends or repurchases of our stock are subject to customary conditions.  We may pay dividends or repurchase stock under these facilities to the extent our total cash and cash equivalents are greater than $100 million and 18.75% of our total indebtedness, whichever is higher; if we cannot satisfy this condition, we are subject to a limitation of 50% of consolidated net income for the quarter preceding such dividend payment or stock repurchase if the collateral maintenance test ratio is 200% or less for such quarter, for which purpose the full commitment of up to $35 million of our new scrubber tranche is assumed to be drawn.  The declaration and payment of any dividend or any stock repurchase is subject to the discretion of our Board of Directors.  The principal business factors that our Board of Directors expects to consider when determining the timing and amount of dividend payments or stock repurchases include our earnings, financial condition, and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends or stock repurchases other than from surplus or while a company is insolvent or would be rendered insolvent by such a payment or repurchase.

We may incur other expenses or liabilities that would reduce or eliminate cash available for dividends.  We may also enter into agreements or the Marshall Islands or another jurisdiction may adopt laws or regulations that further restrict our ability to pay dividends.  If we decrease, suspend or terminate our dividends, our stock price may decline. 

We may not be able to grow or effectively manage our growth, which could cause us to incur additional indebtedness and other liabilities.

Our future growth depends on a number of factors, some of which we cannot control.  These factors include our ability to identify vessels for acquisition; consummate acquisitions or establish joint ventures on favorable terms; integrate acquired vessels successfully with our existing operations; expand our customer base; and obtain required financing for our existing and new operations. Currently, there is no availability under our existing credit facilities. These limitations place significant restrictions on financing that we could use for our growth.

We currently maintain all of our cash and cash equivalents with five financial institutions, which causes credit risk.

We currently maintain all of our cash and cash equivalents with four financial institutions.  None of our balances are covered by insurance in the event of default by the financial institutions

As a holding company, we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or to make dividend payments.

As a holding company, we have no significant assets other than the equity interests in our wholly owned subsidiaries.  As a result, our ability to satisfy our financial obligations and to pay dividends depends on the ability of our subsidiaries, which are all directly or indirectly wholly owned, to distribute funds to us.  In turn, the ability of our subsidiaries to make dividend payments to us depends on their results of operations.
We are at risk for the creditworthiness of our charterers.

The actual or perceived credit quality of our charterers, and any defaults by them, or market conditions affecting the time charter market and the credit markets, may materially affect our ability to obtain the additional capital resources that may be required to purchase additional vessels or may significantly increase our costs of obtaining such
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capital.  Our inability to obtain additional financing at all or at a higher than anticipated cost may have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

If we cannot obtain certain reports as to the effectiveness of our internal control over financial reporting, it could result in a decrease in the value of our common stock.

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to include in this and each of our future annual reports on Form 10-K a report containing our management’s assessment of the effectiveness of our internal control over financial reporting and, if we are an accelerated or large accelerated filer, a related attestation of our independent registered public accounting firm. If, in such future annual reports on Form 10-K, our management cannot provide a report as to the effectiveness of our internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified attestation report as to the effectiveness of our internal control over financial reporting if required by Section 404, investors could lose confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our common stock.

We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.

We are insured against tort claims and some contractual claims (including claims related to environmental damage and pollution) through memberships in protection and indemnity associations or clubs, or P&I associations.  A P&I association provides mutual insurance based on the aggregate tonnage of a member’s vessels entered into the association. Claims are paid through the aggregate premiums of all members, although members remain subject to calls for additional funds if the aggregate premiums are insufficient to cover claims submitted to the association. Claims submitted to the association may include those incurred by members of the association, as well as claims submitted to the association from other P&I associations with which our P&I association has entered into interassociation agreements. The P&I associations to which we belong might not remain viable, or we may become subject to funding calls that could adversely affect us.

We also carry hull and machinery insurance and war risk insurance for our fleet. We also currently maintain insurance against loss of hire, which covers business interruptions that result in the loss of use of a vessel.  We may not be able to renew our insurance policies on commercially reasonable terms, or at all, in the future.  In addition, our insurance may be voidable by the insurers as a result of certain of our actions.  Further, our insurance policies may not cover all losses that we incur, and disputes over insurance claims could arise with our insurance carriers.  Any claims covered by insurance would be subject to deductibles.  In addition, our insurance policies are subject to limitations and exclusions, which may increase our costs or lower our revenues. Any uninsured or underinsured loss could harm our business, results of operations, cash flows, financial condition, and ability to pay dividends.

We may have to pay U.S. tax on U.S. source income, which will reduce our net income and cash flows.

If we do not qualify for an exemption pursuant to Section 883 of the U.S. Internal Revenue Code of 1986, as amended, or the “Code” (which we refer to as the “Section 883 exemption”), then we will be subject to U.S. federal income tax on our shipping income that is derived from U.S. sources.  If we are subject to such tax, our net income and cash flows would be reduced by the amount of such tax.

We will qualify for the Section 883 exemption if, among other things, (i) our stock is treated as primarily and regularly traded on an established securities market in the U.S. (the “publicly traded test”), or (ii) we satisfy the qualified shareholder test or (iii) we satisfy the controlled foreign corporation test (the “CFC test”).  Under applicable Treasury Regulations, the publicly-traded test cannot be satisfied in any taxable year in which persons who actually or constructively own 5% or more of our stock (which we sometimes refer to as “5% shareholders”), together own 50% or more of our stock (by vote and value) for more than half the days in such year (the “five percent override rule”), unless an exception applies. A foreign corporation satisfies the qualified shareholder test if more than 50% of the value of its outstanding shares is owned (or treated as owned by applying certain attribution rules) for at least half of the number of days in the foreign corporation’s taxable year by one or more “qualified shareholders.” A qualified shareholder includes a foreign corporation that, among other things, satisfies the publicly traded test. A foreign corporation satisfies the CFC
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test if it is a “controlled foreign corporation” and one or more qualified U.S. persons own more than 50% of the total value of all the outstanding stock.

Based on the ownership and trading of our stock in 2020 and 2019, we believe that we satisfied the publicly traded test and qualified for the Section 883 exemption in 2020 and 2019. If we do not qualify for the Section 883 exemption, our U.S. source shipping income, i.e., 50% of our gross shipping income attributable to transportation beginning or ending in the U.S., would be subject to a 4% tax without allowance for deductions (the “U.S. gross transportation income tax”). We can provide no assurance that changes and shifts in the ownership of our stock by 5% shareholders will not preclude us from qualifying for the Section 883 exemption in 2021 or future taxable years. In fact, we did not qualify for the Section 883 exemption in 2017. Refer to Note 2 – Summary of Significant Accounting Policies in our Consolidated Financial Statements for further information.

To the extent Genco's U.S. source shipping income, or other U.S. source income, is considered to be effectively connected income, any such income, net of applicable deductions, would be subject to the U.S. federal corporate income tax, currently imposed at a 21% rate. In addition, Genco may be subject to a 30% "branch profits" tax on such income, and on certain interest paid or deemed paid attributable to the conduct of such trade or business. Shipping income is generally sourced 100% to the U.S. if attributable to transportation exclusively between U.S. ports (Genco is prohibited from conducting such voyages), 50% to the U.S. if attributable to transportation that begins or ends, but does not both begin and end, in the U.S. and otherwise 0% to the U.S.

Genco's U.S. source shipping income would be considered effectively connected income only if (i) Genco has,
or is considered to have, a fixed place of business in the U.S. involved in the earning of U.S. source shipping income; and (ii) substantially all of Genco's U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the U.S.

Genco does not intend to have, or permit circumstances that would result in having, any vessel sailing to or from the U.S. on a regularly scheduled basis. Based on the current shipping operations of Genco and Genco’s expected future shipping operations and other activities, Genco believes that none of its U.S. source shipping income will constitute effectively connected income. However, Genco may from time to time generate non-shipping income that may be treated as effectively connected income.

If Genco qualifies for the Section 883 exemption in respect of its shipping income, gain from the sale of a vessel likewise should be exempt from tax under Section 883 of the Code. If, however, Genco's shipping income does not qualify for the Section 883 exemption, and assuming that any gain derived from the sale of a vessel is attributable to Genco's U.S. office, as Genco believes would likely be the case, such gain would likely be treated as effectively connected income (determined under rules different from those discussed above) and subject to the net income and branch profits tax regime described above.

U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders.

A foreign corporation generally will be treated as a “passive foreign investment company,” which we sometimes refer to as a PFIC, for U.S. federal income tax purposes if, after applying certain look through rules, either (1) at least 75% of its gross income for any taxable year consists of “passive income” or (2) at least 50% of the average value or adjusted bases of its assets (determined on a quarterly basis) produce or are held for the production of passive income, i.e., “passive assets.” U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to distributions they receive from the PFIC and gain, if any, they derive from the sale or other disposition of their stock in the PFIC.

For purposes of these tests, “passive income” generally includes dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business, as defined in applicable Treasury Regulations.  Income derived from the performance of services does not constitute “passive income.” By contrast, rental
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income would generally constitute passive income unless such income was treated under specific rules as derived from the active conduct of a trade or business.  We do not believe that our past or existing operations would cause, or would have caused, us to be deemed a PFIC with respect to any taxable year.  In this regard, we treat the gross income we derive or are deemed to derive from our time and spot chartering activities as services income, rather than rental income.  Accordingly, we believe that (1) our income from our time and spot chartering activities does not constitute passive income and (2) the assets that we own and operate in connection with the production of that income do not constitute passive assets.

While there is no direct legal authority under the PFIC rules addressing our method of operation, there is legal authority supporting this position consisting of pronouncements by the U.S. Internal Revenue Service (which we sometimes refer to as the “IRS”), concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes.  However, there is also legal authority, consisting of case law, which characterizes time charter income as rental income rather than services income for other tax purposes.

No assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC.  Moreover, there can be no assurance that we will not become a PFIC in any future taxable year because the PFIC test is an annual test, there are uncertainties in the application of the PFIC rules, and although we intend to manage our business so as to avoid PFIC status to the extent consistent with our other business goals, there could be changes in the nature and extent of our operations in future taxable years.

If we were to be treated as a PFIC for any taxable year (and regardless of whether we remain a PFIC for subsequent taxable years), our U.S. shareholders would face adverse U.S. tax consequences.  Under the PFIC rules, unless a shareholder makes certain elections available under the Code (which elections could themselves have adverse consequences for such shareholder), such shareholder would be liable to pay U.S. federal income tax at the highest applicable ordinary income tax rates upon the receipt of excess distributions and upon any gain from the disposition of our common stock, plus interest on such amounts, as if such excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common stock.

Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations could hurt our business.

We generate all of our revenues in U.S. dollars, but we may incur drydocking costs, voyage expenses (such as port costs), special survey fees and other expenses in other currencies.  If our expenditures on such costs and fees were significant, and the U.S. dollar were weak against such currencies, our business, results of operations, cash flows, financial condition and ability to pay dividends could be adversely affected.

Legislative action relating to taxation could materially and adversely affect us.

Our tax position could be adversely impacted by changes in tax laws, treaties or regulations or the interpretation or enforcement thereof by any tax authority. We cannot predict the outcome of any specific legislative proposals.

RISK FACTORS RELATED TO OUR COMMON STOCK

Certain shareholders own large portions of our common stock, which may limit your ability to influence our actions.

Certain shareholders currently hold significant percentages of our common stock. As of February 24, 2021, affiliates of Centerbridge Partners, L.P. owned approximately 22% and affiliates of Apollo Global Management owned approximately 11% of our common stock. Such holders can influence the outcome of any shareholder vote, including the election of directors, the adoption or amendment of provisions in our articles of incorporation or by-laws and possible mergers, corporate control contests and other significant corporate transactions.  This concentration of ownership may delay, defer, or prevent a change in control, merger, takeover, or other business combination involving us.  This concentration of ownership could also discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which could in turn adversely affect the market price of our common stock.

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Because we are a foreign corporation, you may not have the same rights or protections that a shareholder in a U.S. corporation may have.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law and may make it more difficult for our shareholders to protect their interests.  Our corporate affairs are governed by our amended and restated articles of incorporation and by-laws and the Marshall Islands Business Corporations Act, or BCA.  The provisions of the BCA resemble provisions of the corporation laws of a number of states in the U.S., and the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions. However, the rights and fiduciary responsibilities of directors and shareholder rights under Marshall Islands law are not as clearly established as the rights and fiduciary responsibilities of directors in certain U.S. jurisdictions, and there have been few judicial cases in the Marshall Islands interpreting the BCA. As a result, it may be difficult for our shareholders to protect their interests. 

Future sales of our common stock could cause the market price of our common stock to decline.

The market price of our common stock could decline due to sales of a large number of shares in the market or the perception that these sales could occur.  These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds.

We entered into a registration rights agreement that provides parties who received 10% or more of our common stock in our reorganization with demand and piggyback registration rights. This agreement was amended and restated in connection with our $125 million equity raise and currently covers shares issued to Centerbridge and Apollo. We entered into an additional registration rights agreement that required us to file a resale registration statement that became effective on January 18, 2017 with respect to the resale of 27,061,856 shares of our common stock.

Since December 2020, affiliates of Strategic Value Partners LLC, formerly one of our largest shareholders, have reported sales of approximately 6.7 million of our shares; affiliates of Centerbridge Partners, L.P. have reported sales of approximately 1.3 million of our shares; and affiliates of Apollo Global Management have reported sales of approximately 1.0 million of our shares.  Our shareholders may continue to sell significant volumes of our shares.

We may need to raise additional capital in the future, which may not be available on favorable terms or at all or which may dilute our common stock or adversely affect its market price.

We may require additional capital to expand our business and increase revenues, add liquidity in response to negative economic conditions, meet unexpected liquidity needs, and reduce our outstanding debt. To the extent our existing capital and borrowing capabilities are insufficient, we will need to raise additional funds through debt or equity financings, including offerings of our common stock, securities convertible into our common stock, or rights to acquire our common stock or curtail our growth and reduce our assets or restructure arrangements with existing security holders. Any equity or debt financing, or additional borrowings, if available at all, may be on terms that are not favorable to us. Equity financings could result in dilution to our stockholders, and the securities issued in future financings may have rights, preferences, and privileges that are senior to those of our common stock. To the extent that an existing shareholder does not purchase shares of voting stock, that shareholder’s interest in our company will be diluted, representing a smaller percentage of the vote in our Board of Directors’ elections and other shareholder decisions. If our need for capital arises because of significant losses, the occurrence of these losses may make it more difficult for us to raise the necessary capital. If we cannot raise funds on acceptable terms if and when needed, we may not be able to take advantage of future opportunities, grow our business or respond to competitive pressures or unanticipated requirements.

Volatility in the market price and trading volume of our common stock could adversely impact its trading price.

The market price of our common stock, could fluctuate significantly for many reasons, such as reports by industry analysts, investor perceptions or negative announcements by our competitors or suppliers regarding their own performance, as well as industry conditions and general financial, economic and political instability. A decrease in the market price of our common stock would adversely impact the value of your shares of common stock.

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Provisions of our articles of incorporation and by-laws may have anti-takeover effects which could adversely affect the market price of our common stock.

Several provisions of our articles of incorporation and by-laws are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire our company.  However, these provisions could also discourage, delay or prevent (1) the merger or acquisition of our company through a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Election and Removal of Directors.

Our articles of incorporation prohibit cumulative voting in the election of directors.  Our by-laws require parties other than the board of directors to give advance written notice of nominations for the election of directors.  These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited Actions by Shareholders.

Our articles of incorporation and our by-laws provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by our shareholders’ unanimous written consent.  Our articles of incorporation and our by-laws provide that, subject to certain exceptions, our Chairman, President, or Secretary at the direction of the Board of Directors or our Secretary at the request of one or more shareholders that hold in the aggregate at least a majority of our outstanding shares entitled to vote may call special meetings of shareholders. The business transacted at the special meeting is limited to the purposes stated in the notice.

Advance Notice Requirements for Shareholder Proposals and Director Nominations.

Our by-laws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary.  Generally, the notice must be received at our principal executive offices not less than 120 days nor more than 150 days before the anniversary date of the immediately preceding annual meeting of shareholders.  Our by-laws also specify requirements as to the form and content of a shareholder’s notice.  These provisions may impede a shareholder’s ability to bring matters before or nominate directors at an annual meeting of shareholders.

It may not be possible for our investors to enforce U.S. judgments against us.

We and most of our subsidiaries are organized in the Marshall Islands.  Substantially all of our assets and those of our subsidiaries are located outside the U.S.  As a result, it may be difficult or impossible for U.S. shareholders to serve process within the U.S. upon us or to enforce judgment upon us for civil liabilities in U.S. courts.  You should not assume that courts in the countries in which we are incorporated or where our assets are located (1) would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us based upon these laws.

Security breaches and other disruptions to our information technology infrastructure could interfere with our operations and expose us to liability.

We rely on information technology systems, some of which are managed by third parties, to process, transmit, and store information and manage or support a variety of business processes and activities. We also collect and store certain data, including proprietary business information and customer and employee data. Despite our cybersecurity measures, our information technology networks and infrastructure may be vulnerable to damage, disruptions, or shutdowns due to attack by hackers or breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters, or other catastrophic events, which could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to our reputation, which could materially adversely affect our business.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

We do not own any real property.  Effective April 4, 2011, we entered into a seven-year sub-sublease agreement for our main office in New York, New York.  The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments were $0.1 million per month until May 31, 2015 and thereafter were $0.1 million per month until the end of the seven-year term.  We also entered into a direct lease with the over-landlord of such office space that commenced immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provided for a free base rental period from May 1, 2018 to September 30, 2018.  Following the expiration of the free base rental period, the monthly base rental payments are $0.2 million per month from October 1, 2018 to April 30, 2023 and $0.2 million per month from May 1, 2023 to September 30, 2025.  

Future minimum rental payments on the above lease for the next five years are as follows:  $2.2 million annually for 2021 through 2022, $2.4 million for 2023, $2.5 million for 2024 and $1.8 million for 2025

On June 14, 2019, we entered into a sublease agreement for a portion of this leased space for our main office in New York, New York that commenced on July 26, 2019 and will end on September 29, 2025.  There was a free base rental period for the first four and a half months commencing on July 26, 2019.  Following the expiration of the free base rental period, the monthly base sublease income is $0.1 million per month until September 29, 2025. 

In addition, during October 2017 we entered into a lease for office space in Singapore that expired in January 2019. A lease was signed for a new office space in Singapore effective January 17, 2019 for a three-year term.

Lastly, during July 2018, we entered into a lease for office space in Copenhagen which commenced on July 1, 2018 and ended on April 30, 2019. A lease was signed for a new office space in Copenhagen effective May 1, 2019 for a minimum period ending May 1, 2023.

For a description of our vessels, see “Our Fleet” in Item 1, “Business” in this report. All of the vessels in our current fleet serve as collateral under our credit facilities. Please see “Liquidity and Capital Resources” and “Critical Accounting Policies — Vessels and Depreciation” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” for a further description. The foregoing descriptions are incorporated into this Item 2 by reference.

We consider each of our significant properties to be suitable for its intended use.

ITEM 3. LEGAL PROCEEDINGS

We are not involved in any legal proceedings that we believe are likely to have, or have had a significant effect on our business, financial position, results of operations or cash flows, nor are we aware of any proceedings that are pending or threatened which we believe are likely to have a significant effect on our business, financial position, results of operations or liquidity.  From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims.  We expect that these claims would be covered by insurance, subject to customary deductibles.  Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION, HOLDERS AND DIVIDENDS

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “GNK.”

As of February 24, 2021, there were approximately 15 holders of record of our common stock.

Our Board of Directors adopted a quarterly dividend policy following the third quarter of 2019 to pay a dividend of $0.175 per share, and the first quarterly dividend under this policy was announced on November 6, 2019, together with a special dividend of $0.325 per share.  In light of market weakness and heightened economic uncertainty as a result of the COVID-19 pandemic, in May 2020, our Board of Directors determined following its quarterly review that it would be prudent to reduce our regular quarterly dividend for each quarter of 2020 to $0.02 per share beginning in the first quarter of 2020 in order to support our balance sheet and liquidity position and better position us for an eventual economic recovery. Our Board expects to reassess the payment of dividends as appropriate from time to time. Our declaration and payment of dividends is subject to a number of conditions and restrictions as described below.  Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with law and contractual obligations and our Board of Directors’ determination that each declaration and payment is in the best interest of the Company and our shareholders. 

For a discussion of restrictions applicable to our payment of dividends, please see “Liquidity and Capital Resources—Dividends” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” below.

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PART II

ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

		For the Years Ended December 31,		
	    	2020	    	2019	    	2018	    	2017	    	2016	    	
Income Statement Data:																	
(U.S. dollars in thousands except for share and per share amounts)					
Revenues:																	
Voyage revenues	    	$	355,560	    	$	389,496	    	$	367,522	    	$	209,698	    	$	133,246		
Service revenues		 	—		 	—		 	—		 	—		 	2,340		
Total revenues		$	355,560		$	389,496		$	367,522		$	209,698		$	135,586		
																	
Operating Expenses:																	
Voyage expenses		 	156,985		 	173,043		 	114,855		 	25,321		 	13,227		
Vessel operating expenses		 	87,420		 	96,209		 	97,427		 	98,086		 	113,636		
Charter hire expenses			10,307			16,179			1,534			—			—		
General and administrative expenses (inclusive of nonvested stock amortization expense of $2,026, $2,057, $2,231, $4,053 and $20,680, respectively)		 	21,266		 	24,516		 	23,141		 	22,190		 	45,174		
Technical management fees			6,961			7,567			8,000			7,659			8,932		
Depreciation and amortization		 	65,168		 	72,824		 	68,976		 	71,776		 	76,330		
Other operating income		 	—		 	—		 	—		 	—		 	(960)		
Impairment of vessel assets		 	208,935		 	27,393		 	56,586		 	21,993		 	69,278		
Loss (gain) on sale of vessels		 	1,855		 	168		 	(3,513)		 	(7,712)		 	(3,555)		
																	
Total operating expenses		 	558,897		 	417,899		 	367,006		 	239,313		 	322,062		
																	
Operating (loss) income		 	(203,337)		 	(28,403)		 	516		 	(29,615)		 	(186,476)		
Other expense		 	(22,236)		 	(27,582)		 	(33,456)		 	(29,110)		 	(30,300)		
																	
Loss before reorganization items, net		 	(225,573)		 	(55,985)		 	(32,940)		 	(58,725)		 	(216,776)		
Reorganization items, net		 	—		 	—		 	—		 	—		 	(272)		
																	
Net loss before income taxes		 	(225,573)		 	(55,985)		 	(32,940)		 	(58,725)		 	(217,048)		
Income tax expense		 	—		 	—		 	—		 	—		 	(709)		
Net loss		$	(225,573)		$	(55,985)		$	(32,940)		$	(58,725)		$	(217,757)		
Net loss per share - basic (1)		$	(5.38)		$	(1.34)		$	(0.86)		$	(1.71)		$	(30.03)		
Net loss per share - diluted (1)		$	(5.38)		$	(1.34)		$	(0.86)		$	(1.71)		$	(30.03)		
Weighted average common shares outstanding - Basic (1)		 	41,907,597		 	41,762,893		 	38,382,599		 	34,242,631		 	7,251,231		
Weighted average common shares outstanding - Diluted (1)		 	41,907,597		 	41,762,893		 	38,382,599		 	34,242,631		 	7,251,231		

		For the Years Ended December 31,		
	    	2020	    	2019	    	2018	    	2017	    	2016	    	
Balance Sheet Data:																	
(U.S. dollars in thousands, at end of period)					
Cash, including restricted cash		$	179,679		$	162,249		$	202,761		$	204,946		$	169,068		
Total assets			1,232,809		 	1,528,892		 	1,627,470		 	1,520,959			1,568,960		
Total debt (current and long-term, net of deferred financing costs)			439,575		 	482,730		 	535,148		 	515,392			513,020		
Total equity			744,994		 	978,428		 	1,053,307		 	975,027			1,029,699		
Other Data:																	
(U.S. dollars in thousands)																	
																	
Net cash provided by (used in) operating activities		$	36,896		$	59,526		$	65,907		$	24,071		$	(52,307)		
Net cash provided by (used in) investing activities (3)			37,439		 	(22,849)		 	(195,375)		 	17,405			25,051		
Net cash (used in) provided by financing activities			(56,905)		 	(77,189)		 	127,283		 	(5,598)			55,435		
																	
EBITDA (2)		$	(139,020)		$	44,699		$	65,326		$	41,997			(112,469)		

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	(1)	On July 7, 2016, we completed a one-for-ten reverse stock split with no change in par value per share. The authorized shares of the common stock were not adjusted. All common share and per share amounts of the Company prior to July 7, 2016 have retroactively adjusted to reflect the reverse stock split.	

	(2)	EBITDA represents net (loss) income plus net interest expense, taxes and depreciation and amortization.  EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers.  Our management uses EBITDA as a performance measure in our consolidated internal financial statements, and it is presented for review at our board meetings.  We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing.  EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs.  EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP.  EBITDA is not a measure of liquidity or cash flows as shown in our Consolidated Statements of Cash Flows.  The definition of EBITDA used here may not be comparable to that used by other companies.  The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net loss for each of the periods presented above:	

		For the Years Ended December 31,		
	    	2020	    	2019	    	2018	    	2017	    	2016	    	
Net loss		$	(225,573)		$	(55,985)		$	(32,940)		$	(58,725)		$	(217,757)		
Net interest expense		 	21,385		 	27,860		 	29,290		 	28,946			28,249		
Income tax expense		 	—		 	—		 	—		 	—			709		
Depreciation and amortization		 	65,168		 	72,824		 	68,976		 	71,776			76,330		
																	
EBITDA (2)		$	(139,020)		$	44,699		$	65,326		$	41,997		$	(112,469)		

	(3)	In the first quarter of 2017, the Company adopted ASU 2016-18, which requires the Company to show the changes in the total cash, cash equivalents and restricted cash in the statement of cash flows. Changes in restricted cash were previously recorded as an investing cash inflow or outflow. The adoption of ASU 2016-18 resulted in a change in net cash provided by (used in) investing activities of $15.9 million during the year ended December 31, 2016.	

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and notes thereto included in Item 8 - Financial Statements and Supplementary Data.

The MD&A generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 27, 2020.

We are a Marshall Islands company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels.  After the sale of two of our Supramax vessels, our fleet will consist of 39 drybulk carriers, including 17 Capesize drybulk carriers, nine Ultramax drybulk carriers, and thirteen Supramax drybulk carriers with an aggregate carrying capacity of approximately 4,315,000 deadweight tons (“dwt”).  The average age of our current fleet is approximately 10.1 years.  We seek to deploy our vessels on time charters, spot market voyage charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers.  The majority of the vessels in our current fleet are presently engaged under time charter and spot market voyage charters that expire (assuming the option periods in the time charters are not exercised) between February 2021 and June 2021.

See pages 3 - 4 for a table of our current fleet.

COVID-19

In March 2020, the World Health Organization (the “WHO”) declared the outbreak of a novel coronavirus strain, or COVID-19, to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Governments have implemented measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, working from home, supply chain logistical changes, and closure of non-essential businesses. This has led to a significant slowdown in overall economic activity levels globally and a decline in demand for certain of the raw materials that our vessels transport.

Drybulk shipping rates, and therefore our voyage revenues, depend to a significant degree on global economic activity levels and specifically, economic activity in China. As the world’s second largest economy, China is the largest importer of drybulk commodities globally, which drives demand for iron ore, coal and other cargoes we carry. In particular, earlier in 2020, the COVID-19 pandemic resulted in reduced industrial activity in China on which our business is substantially dependent, with temporary closures of factories and other facilities. The pandemic resulted in a 6.8% contraction in China’s GDP during the first quarter of 2020, with the most significant impact occurring in January and February. Since March, China’s economy has substantially improved, as various economic indicators such as fixed asset investment and industrial production rose as compared to the previous months of the year, which led to GDP growth of 3.2%, 4.9% and 6.5% during the second, third and fourth quarters of 2020, respectively. However, economic activity levels in regions outside of China declined significantly beginning in the first quarter of 2020 and continuing into the second quarter of the year due to various forms of nationwide shutdowns being imposed to prevent the spread of COVID-19. India, Japan, Europe and the U.S., which are important drivers of demand for drybulk trade, have seen meaningful contractions in economic output in the year to date. Several economies around the world gradually eased measures taken earlier in 2020 resulting in improved activity levels from earlier year lows. The impact of the economic
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contraction remains highly dependent on the trajectory of COVID-19 and the timing of wide-scale vaccine distribution, which remains uncertain.

While global economic activity levels, led by China, have improved, the outlook for China and the rest of the world remains uncertain and is highly dependent on the path of COVID-19 and measures taken by governments around the world in response to it. Drybulk commodities that are closely tied to global GDP growth, such as coal and various minor bulk cargoes, experienced reduced trade flows in 2020 due to lower end user demand resulting from a decline in global economic activity. As countries worldwide gradually reopened their respective economies in mid-2020, trade flows and demand for raw materials increased, particularly during the second half of 2020. Drybulk spot freight rates increased off of the year to date lows towards the end of the second quarter and remained firm in the second half of 2020. During the fourth quarter of 2020 and early 2021, there has been a resurgence of the virus in some European countries and the U.S. that may impact the sustainability of this recovery in addition to drybulk specific seasonality described in further detail below.

As our vessels continue to trade commodities globally, we have taken measures to safeguard our crew and work toward preventing the spread of COVID-19. Crew members have received gloves, face masks, hand sanitizer, goggles and handheld thermometers. Genco requires its vessel crews to wear masks when in contact with other individuals who board the vessel. We continue to monitor the Centers for Disease Control and Prevention (the “CDC”) and the WHO guidelines and are also limiting access of shore personnel boarding our vessels. Specifically, no shore personnel with fever or respiratory symptoms are allowed on board, and those that are allowed on board are restricted to designated areas that are thoroughly cleaned after their use. Face masks are also provided to shore personnel prior to boarding a vessel. Precautionary materials are posted in common areas to supplement safety training while personal hygiene best practices are strongly encouraged on board.

We have implemented protocols with regard to crew rotations to keep our crew members safe and healthy which includes polymerase chain reaction (PCR) antibody testing as well as a 14-day quarantine period prior to boarding a vessel. Genco is enacting crew changes where permitted by regulations of the ports and of the country of origin of the mariners, in addition to strict protocols that safeguard our crews against COVID-19 exposure. Crew rotations have been challenging in recent months due to port and travel restrictions globally, as well as promoting the health and safety of both on and off signing crew members.

Onshore, our offices located in New York and Singapore are temporarily closed with our personnel working remotely. Our office in Copenhagen reopened in June 2020 following approximately three months during which our team worked remotely. Regarding our headquarters in New York, we are planning to implement a phased-in approach towards reopening the office; however a return date has not yet been determined. We currently have placed a ban on all non-essential travel.

The COVID-19 pandemic and measures to contain its spread thus have negatively impacted and could continue to impact regional and global economies and trade patterns in markets in which we operate, the way we operate our business, and the businesses of our charterers and suppliers. These impacts may continue or become more severe. Although we have successfully completed a number of crew changes over the course of the pandemic to date, additional crew changes could remain challenging due to COVID-19 related factors. The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including the duration and scope of the pandemic; governmental, business, and individuals’ actions in response to the pandemic; and the impact on economic activity, including the possibility of recession or financial market instability.

U.S.-China Trade Dispute

Over the course of 2018 and 2019, the United States imposed a series of tariffs on several goods imported from various countries. Certain of these countries, including China, undertook retaliatory actions by implementing tariffs on select U.S. products. Most notably in terms of drybulk trade volumes is China’s tariff placed upon U.S. soybean exports, which could adversely affect drybulk rates. With the signing of the “phase one” trade agreement between China and the U.S. in January 2020, China has agreed in principle to purchase meaningful quantities of agricultural products, including soybeans, from the U.S.  Peak North American grain season historically ramps up during the fourth quarter and extends
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into the early first quarter of the following year. In recent months, China has purchased large amounts of agricultural products that are transported on drybulk vessels which has helped support freight rates for the mid-sized and smaller vessel classes. It remains to be seen the stance the new U.S. administration will take towards China as well as any previously agreed upon trade deals. Any deterioration in the trading relationship or a re-escalation of protectionist measures taken between these countries or others could lead to reduced volumes of drybulk trade.

IMO 2020 Compliance

On October 27, 2016, the Marine Environment Protection Committee (“MEPC”) of the International Maritime Organization (“IMO”) announced the ratification of regulations mandating reduction in sulfur emissions from 3.5% currently to 0.5% as of the beginning of 2020 rather than pushing the deadline back to 2025. Accordingly, ships now have to reduce sulfur emissions, for which the principal solutions are the use of exhaust gas cleaning systems (“scrubbers”) or buying fuel with low sulfur content. If a vessel is not retrofitted with a scrubber, it will need to use low sulfur fuel, which is currently more expensive than standard marine fuel containing 3.5% sulfur content.  This increased demand for low sulfur fuel resulted in an increase in prices for such fuel during the beginning of 2020. Following a decrease during the second quarter of 2020, fuel prices began to increase again during the third quarter of 2020 and continue to increase due to such demand.
 
In order to comply with regulations mandating a reduction in sulfur emissions from 3.5% to 0.5% as of the beginning of 2020, we entered into agreements to install exhaust gas cleaning systems (“scrubbers”) on our 17 Capesize vessels, sixteen of which installations were completed by December 31, 2019, and the last of which the installation was completed by January 17, 2020. Additionally, we have transitioned to consuming IMO compliant fuels as of January 1, 2020 on our vessels that are not equipped with scrubbers and when our scrubbers may not be used. We will continue to evaluate all options to comply with IMO regulations. Our fuel costs and fuel inventories may increase as a result of these sulfur emission regulations. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand.  If the cost differential between low sulfur fuel and high sulfur fuel is significantly higher than anticipated, or if low sulfur fuel is not available at ports on certain trading routes, it may not be feasible or competitive to operate vessels on certain trading routes without installing scrubbers or without incurring deviation time to obtain compliant fuel.  Conversely, if the cost differential between low sulfur fuel and high sulfur fuel is significantly lower than anticipated, or if regulations are passed negatively impacting the use of open-loop scrubbers, we may not realize the economic benefits or recover the cost of the scrubbers we have installed.  In addition, a number of countries have imposed restrictions on the discharge of wash water from open loop scrubbers within their port limits. While there are no restrictions on using open loop scrubbers outside of port limits, any changes in these regulations or more stringent standards globally could impact the use of open loop scrubbers going forward.

Vessel Sales and Acquisitions

On December 17, 2020, we entered into an agreement to acquire three modern, eco Ultramax vessels in exchange for six of our older Handysize vessels. The Genco Magic, a 2014-built Ultramax vessel, and the Genco Vigilant and the Genco Freedom, both 2015-built Ultramax vessels, were delivered to the Company on December 23, 2020, January 28, 2021 and February 20, 2021, respectively. We delivered the Genco Ocean, Baltic Cove and Baltic Fox, all 2010-built Handysize vessels, and the Genco Spirit, Genco Avra and Genco Mare, all 2011-built Handysize vessels, on December 29, 2020, January 30, 2021, February 2, 2021, February 15, 2021, February 21, 2021 and February 24, 2021, respectively.

During 2020, we completed the sale of nine of our vessels, including the Genco Ocean as noted above, and have entered into agreements to sell ten additional vessels, including the remaining five Handysize vessels noted above. Of the additional five vessels we have entered into agreements to sell, excluding the five Handysize vessels noted above, we have completed the sale of three vessels during January and February 2021. Three vessels were classified as held for sale as of December 31, 2020 and the five Handysize vessels were classified as held for exchange as of December 31, 2020. During 2019, we completed the sale of four vessels, one of which was classified as held for sale as of December 31, 2018. We will continue to seek opportunities to renew our fleet going forward.

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Factors Affecting Our Results of Operations

We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, chartered-in days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the years ended December 31, 2020 and 2019 on a consolidated basis.

		For the Years Ended						 	
		December 31, 		Increase			 	
	    	2020	    	2019	    	(Decrease)	    	% Change	 	
Fleet Data:												 	
Ownership days (1)													
Capesize	 		6,222.0			6,205.0			17.0	 	0.3	%	
Panamax	 		64.8			736.6			(671.8)	 	(91.2)	%	
Ultramax	 		2,204.0			2,190.0			14.0	 	0.6	%	
Supramax	 		7,176.0			7,300.0			(124.0)	 	(1.7)	%	
Handymax	 		—			—			—	 	—	%	
Handysize	 		3,290.0			4,590.9			(1,300.9)	 	(28.3)	%	
													
Total	 		18,956.8			21,022.5			(2,065.7)	 	(9.8)	%	
													
Chartered-in days (2)													
Capesize			—			227.3			(227.3)		(100.0)	%	
Panamax			—			—			—		—	%	
Ultramax			557.1			128.5			428.6		333.5	%	
Supramax			567.2			658.7			(91.5)	 	(13.9)	%	
Handymax			14.5			17.4			(2.9)		(16.7)	%	
Handysize			77.4			293.9			(216.5)		(73.7)	%	
													
Total			1,216.2			1,325.8			(109.6)		(8.3)	%	
													
Available days (owned & chartered-in fleet) (3)													
Capesize	 		6,158.2			5,573.9			584.3	 	10.5	%	
Panamax	 		64.4			732.0			(667.6)	 	(91.2)	%	
Ultramax	 		2,657.5			2,299.3			358.2	 	15.6	%	
Supramax	 		7,443.1			7,547.4			(104.3)	 	(1.4)	%	
Handymax	 		14.5			17.4			(2.9)	 	(16.7)	%	
Handysize	 		3,298.2			4,824.9			(1,526.7)	 	(31.6)	%	
													
Total	 		19,635.9			20,994.9			(1,359.0)	 	(6.5)	%	
													
Available days (owned fleet) (4)													
Capesize			6,158.2			5,346.6			811.6	 	15.2	%	
Panamax			64.4			732.0			(667.6)	 	(91.2)	%	
Ultramax			2,100.4			2,170.8			(70.4)	 	(3.2)	%	
Supramax			6,875.9			6,888.7			(12.8)	 	(0.2)	%	
Handymax			—			—			—	 	—	%	
Handysize			3,220.8			4,531.0			(1,310.2)	 	(28.9)	%	
													
Total			18,419.7			19,669.1			(1,249.4)	 	(6.4)	%	
													
Operating days (5)													
Capesize	 		6,093.0			5,525.4			567.6	 	10.3	%	
Panamax	 		60.1			697.0			(636.9)	 	(91.4)	%	
Ultramax	 		2,642.8			2,240.1			402.7	 	18.0	%	
Supramax	 		7,338.1			7,413.2			(75.1)	 	(1.0)	%	
Handymax	 		14.5			17.4			(2.9)	 	(16.7)	%	
Handysize	 		3,055.9			4,695.8			(1,639.9)	 	(34.9)	%	
													
Total	 		19,204.4			20,588.9			(1,384.5)	 	(6.7)	%	
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		For the Years Ended						 	
		December 31, 		Increase			 	
	    	2020	    	2019	    	(Decrease)	    	% Change	 	
													
Fleet utilization (6)													
Capesize	 		98.2	%  		98.4	%  		(0.2)	%  	(0.2)	%	
Panamax	 		92.7	%  		94.6	%  		(1.9)	%  	(2.0)	%  	
Ultramax	 		99.3	%  		97.4	%  		1.9	%  	2.0	%	
Supramax	 		97.6	%  		97.3	%  		0.3	%  	0.3	%	
Handymax	 		100.0	%  		100.0	%  		—	%  	—	%	
Handysize	 		92.2	%  		97.3	%  		(5.1)	%  	(5.2)	%	
													
Fleet average	 		97.1	%  		97.5	%  		(0.4)	%  	(0.4)	%	

													
		For the Years Ended							
		December 31, 		Increase				
	    	2020	    	2019	    	(Decrease)	    	% Change	 	
Average Daily Results:													
Time Charter Equivalent (7)													
Capesize		$	14,977		$	13,181		$	1,796	 	13.6	%	
Panamax		 	4,948		 	10,397		 	(5,449)	 	(52.4)	%	
Ultramax		 	10,320		 	10,994		 	(674)	 	(6.1)	%	
Supramax		 	7,957		 	8,939		 	(982)	 	(11.0)	%	
Handymax		 	—		 	—		 	—	 	—	%	
Handysize		 	5,987		 	8,157		 	(2,170)	 	(26.6)	%	
													
Fleet average		 	10,221		 	10,182		 	39	 	0.4	%	
Major bulk vessels			14,977			13,181			1,797		13.6	%	
Minor bulk vessels			7,832			9,063			(1,231)		(13.6)	%	
													
Daily vessel operating expenses (8)													
Capesize		$	5,106		$	5,076		$	30	 	0.6	%	
Panamax		 	3,290		 	4,621		 	(1,331)	 	(28.8)	%	
Ultramax		 	4,606		 	4,665		 	(59)	 	(1.3)	%	
Supramax		 	4,456		 	4,474		 	(18)	 	(0.4)	%	
Handymax		 	—		 	—		 	—	 	—	%	
Handysize		 	3,994		 	4,016		 	(22)	 	(0.5)	%	
													
Fleet average		 	4,612		 	4,576		 	36	 	0.8	%	

(1)	Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.	

(2)	Chartered-in days. We define chartered-in days as the aggregate number of days in a period during which we chartered-in third party vessels. 	

(3)	Available days (owned and chartered-in fleet). We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to familiarization upon acquisition, repairs or repairs under guarantee, vessel upgrades or special surveys.  Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.	

(4)	Available days (owned fleet). We define available days for the owned fleet as available days less chartered-in days.	

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(5)	Operating days. We define operating days as the number of our total available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 	

(6)	Fleet utilization. We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus chartered-in days less drydocking days. 	

(7)	Time Charter Equivalent (“TCE”). We define TCE rates as our voyage revenues less voyage expenses and charter-hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.	

		Entire Fleet		Major Bulk		Minor Bulk		 	
		For the Years Ended		For the Years Ended		For the Years Ended			
		December 31, 		December 31, 		December 31, 			
	 	2020	    	2019		2020	    	2019		2020	    	2019		 	
Voyage revenues (in thousands)		$	355,560		$	389,496		$	164,813		$	151,408		$	190,747		$	238,088			
Voyage expenses (in thousands)		 	156,985		 	173,043		 	72,577		 	75,339		 	84,408		 	97,704			
Charter hire expenses (in thousands)			10,307			16,179			3			5,598			10,304			10,581			
		 	188,268		 	200,274		 	92,233		 	70,471		 	96,035		 	129,803			
Total available days for owned fleet		 	18,420		 	19,669		 	6,158		 	5,347		 	12,262		 	14,323			
Total TCE rate		$	10,221		$	10,182		$	14,977		$	13,181		$	7,832		$	9,063			

	(8)	Daily vessel operating expenses. We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.  Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.	

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Operating Data

The following tables represent the operating data and certain balance sheet and other data as of and for the years ended December 31, 2020 and 2019 on a consolidated basis.

													
		For the Years Ended December 31,						 	
	    	2020	    	2019	    	Change	    	% Change	 	
Income Statement Data:													
(U.S. Dollars in thousands, except for per share amounts)													
Revenue:													
Voyage revenues		$	355,560		$	389,496		$	(33,936)	 	(8.7)	%	
													
Total revenues		 	355,560		 	389,496		 	(33,936)	 	(8.7)	%	
													
Operating Expenses:													
Voyage expenses		 	156,985		 	173,043		 	(16,058)	 	(9.3)	%	
Vessel operating expenses		 	87,420		 	96,209		 	(8,789)	 	(9.1)	%	
Charter hire expenses			10,307			16,179			(5,872)		(36.3)	%	
General and administrative expenses (inclusive of nonvested stock amortization expense of $2,026 and $2,057, respectively)		 	21,266		 	24,516		 	(3,250)	 	(13.3)	%	
Technical management fees			6,961			7,567			(606)		(8.0)	%	
Depreciation and amortization		 	65,168		 	72,824		 	(7,656)	 	(10.5)	%	
Impairment of vessel assets			208,935			27,393			181,542		662.7	%	
Loss on sale of vessels		 	1,855		 	168		 	1,687	 	1,004.2	%	
													
Total operating expenses		 	558,897		 	417,899		 	140,998	 	33.7	%	
													
Operating loss		 	(203,337)		 	(28,403)		 	(174,934)	 	615.9	%	
Other expense		 	(22,236)		 	(27,582)		 	5,346	 	(19.4)	%	
													
Net loss		 	(225,573)		 	(55,985)		 	(169,588)	 	302.9	%	
													
Net loss per share - basic		$	(5.38)		$	(1.34)		$	(4.04)	 	301.5	%	
Net loss per share - diluted		$	(5.38)		$	(1.34)		$	(4.04)	 	301.5	%	
Weighted average common shares outstanding - basic		 	41,907,597		 	41,762,893			144,704	 	0.3	%	
Weighted average common shares outstanding - diluted		 	41,907,597		 	41,762,893			144,704	 	0.3	%	

		For the Years Ended December 31,						 	
	    	2020	    	2019	    	Change	    	% Change	 	
Balance Sheet Data:													
(U.S. Dollars in thousands, at end of period)													
Cash, including restricted cash		$	179,679		$	162,249		$	17,430	 	10.7	%	
Total assets		 	1,232,809		 	1,528,892		 	(296,083)	 	(19.4)	%	
Total debt (current and long-term, net of deferred financing fees)		 	439,575		 	482,730		 	(43,155)	 	(8.9)	%	
Total equity		 	744,994		 	978,428		 	(233,434)	 	(23.9)	%	
													
Other Data:													
(U.S. Dollars in thousands)													
Net cash provided by operating activities		$	36,896		$	59,526		$	(22,630)	 	(38.0)	%	
Net cash provided by (used in) investing activities		 	37,439		 	(22,849)		 	60,288	 	(263.9)	%	
Net cash used in financing activities		 	(56,905)		 	(77,189)		 	20,284	 	(26.3)	%	
													
EBITDA (1)		$	(139,020)		$	44,699		$	(183,719)	 	(411.0)	%	

(1)	EBITDA represents net loss plus net interest expense, taxes and depreciation and amortization.  Refer to page 40 included in Item 6 where the use of EBITDA is discussed and for a table demonstrating our calculation of EBITDA that provides a reconciliation of EBITDA to net (loss) income attributable to Genco Shipping & Trading for each of the periods presented above.	
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Results of Operations

VOYAGE REVENUES-

Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate, the type of fixture our vessels are chartered on (spot market voyage charters or fixed rate time charters), and the amount of daily charterhire or freight rates that our vessels earn, that, in turn, are affected by a number of factors, including:

	●	the duration of our charters;	

	●	our decisions relating to vessel acquisitions and disposals;	

	●	the amount of time that we spend positioning our vessels;	

	●	the amount of time that our vessels spend in drydock undergoing repairs;	

	●	maintenance and upgrade work;	

	●	the age, condition and specifications of our vessels;	

	●	levels of supply and demand in the drybulk shipping industry; and	

	●	other factors affecting spot market charter rates for drybulk carriers.	

During 2020, voyage revenues decreased by $33.9 million, or 8.7%, to $355.6 million as compared to $389.5 million during 2019. The decrease in voyage revenues was primarily due to the operation of fewer vessels in our fleet. During the first half of 2020, drybulk seasonal factors such as the timing of newbuilding deliveries, the Lunar New Year holiday celebration in China and weather-related cargo disruptions impacted the drybulk freight rate environment. These factors were further accentuated by the onset of COVID-19 and subsequent reactions to prevent its spread taken by various countries essential to drybulk trade flows. In mid-2020, a gradual reopening of economies contributed to increased trade flows and a firm freight rate environment during the second half of 2020 as compared to the first half of the year. During the second half of 2020, the economic recovery in China resulted in record volumes of seaborne iron ore imports to fuel all-time high steel production and replenish low inventory levels. This demand was aided by improved Brazilian iron ore exports, which has been constrained earlier in the year due to poor weather conditions and operational challenges from the Brumadinho dam collapse in January 2019.

The average Time Charter Equivalent (“TCE”) rate of our overall fleet increased marginally by 0.4% to $10,221 a day during 2020 from $10,182 a day during 2019. The TCE for our major bulk vessels increased by 13.6% from $13,181 a day during 2019 to $14,977 a day during 2020. This increase was primarily a result of additional drydocking days during 2019 as a result of the installation of scrubbers on our Capesize vessels. The TCE for our minor bulk vessels decreased by 13.6% from $9,063 a day during 2019 to $7,832 a day during 2020 primarily a result of lower rates achieved by our Panamax and Handysize vessels, as well as offhire days associated with COVID-19 delays during 2020 and delays in the completion of the sale of the Baltic Breeze and Genco Bay during the third quarter of 2020.

The overall uncertainty surrounding the impact of COVID-19 on our business, together with reduced economic activity and in turn trade flows, could continue to negatively impact the revenue generated by our vessels. While we believe that the gradual reopening of economies affected by COVID-19 has begun to lead to increased global trade flows and a rise in drybulk shipping rates, the sustainability of the recovery cannot be predicted and could be affected by a resurgence of the virus and the timing of wide-scale vaccine distribution. Furthermore, deviation time associated with positioning our vessels to countries in which we can undertake a crew rotation due to various travel and port restrictions
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related to COVID-19, resulted in days in 2020 in which our vessels were unable to earn revenue and may continue to do so.

For 2020 and 2019, we had ownership days of 18,956.8 days and 21,022.5 days, respectively.  The decrease in ownership days is primarily due to the sale of four vessels during 2019 and nine vessels during 2020 partially offset by the delivery of one vessel during 2020. Fleet utilization decreased marginally from 97.5% during 2019 to 97.1% during 2020.

Please see pages 6 - 7 for a table that sets forth information about the current employment of the vessels in our fleet.

VOYAGE EXPENSES-

In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. There are certain other non-specified voyage expenses such as commissions which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on spot market voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses.  Voyage expenses also include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement. Additionally, we may record lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. Refer to Note 2 — Summary of Significant Accounting Policies in our Consolidated Financial Statements.

Due to various travel and port restrictions relating to COVID-19 and our strong emphasis on maintaining the health and safety of both our on-signing and off-signing crew members, we experienced increased deviation time for certain of our vessels to undertake crew rotations during the third and fourth quarter of 2020. As such, we have experienced higher voyage expenses for certain crew changes that we have completed, which we expect to continue as a result of COVID-19 restrictions imposed by various counties. These increased voyage expenses are due to the incremental fuel consumption of deviating to certain ports on which we would ordinarily not call during a typical voyage. 

As a result of installing scrubbers on all of our 17 Capesize vessels, which accounted for approximately 50% of our fleet’s fuel consumption in 2020, we realized significant fuel cost savings during 2020. The amount of savings we realize, and the amount of time in which we would recover our investment in scrubbers, depends on the spread between high sulfur and low sulfur fuel. The spread between these two fuel types is currently approximately $130 per metric ton, and was as high as $361 per metric ton and as low as $47 per metric ton during 2020.

Voyage expenses were $157.0 million and $173.0 million during 2020 and 2019, respectively. This decrease was primarily due to the operation of fewer vessels during 2020, as well as a decrease in bunker consumption.

VESSEL OPERATING EXPENSES-

Vessel operating expenses decreased by $8.8 million from $96.2 million during 2019 to $87.4 million during 2020. This decrease was primarily due to fewer owned vessels during 2020 as compared to 2019.

Average daily vessel operating expenses for our fleet increased marginally by $36 per day from $4,576 per day during 2019 as compared to $4,612 in 2020.  The increase in daily vessel operating expenses was predominantly due to higher crew related expenses, partially offset by lower drydocking related expenditures. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Our actual daily vessel operating
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expenses per vessel for the year ended December 31, 2020 were $22 above the weighted-average budgeted rate of $4,590 per vessel per day.

Restrictions on crew rotations led to a temporary decline in crewing related expenses of approximately $1 million during the first half of 2020. However, such costs began to increase in June 2020, reaching their highest level during the third quarter of 2020. Although we have completed a significant number of crew rotations, we still expect higher costs related to crew rotations surrounding COVID-19 restrictions. Travel and port restrictions together with promoting the health of the on-signing crew boarding the ship while the off-signing crew gets home safely have all been increasing challenges that shipowners are facing globally. As crew members worldwide have in many cases, including on certain of our vessels, exceeded the duration of their contracts there is an increased urgency to work towards completing more crew rotations in the coming months. Given this urgency, since June 2020, certain of these crew rotations have led to and could continue to lead to additional deviation time of our vessels as well as unbudgeted expenses due to testing, PPE, quarantine periods and higher than normal travel expenses due to increased airfare costs.

The timing of crew rotations remains dependent on the duration and severity of COVID-19 in countries from which our crews are sourced as well as any restrictions in place at ports in which our vessels call. In cases when crew rotations have been delayed further, we have paid some additional costs related to crew bonuses to retain the existing crew members on board since June 2020 and may continue to do so.

Our vessel operating expenses, which generally represent fixed costs for each vessel, increase to the extent our fleet expands. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase. The impact of COVID-19 could result in potential shortages or a lack of access to required spare parts for the operation of our vessels, potential delays in any unscheduled repairs, deviations for crew changes or increased costs to successfully execute a crew change, which could lead to business disruptions and delays. We expect that crew costs for the crew that we utilize on our vessels will increase going forward due to expected higher wages, as well as the impact of COVID-19 restrictions.

Based on our management’s estimates and budgets provided by our technical manager for our fleet, we expect our vessels to have average daily vessel operating expenses during 2021 of:

	    	Average Daily	 	
Vessel Type	    	Budgeted Amount	 	
Capesize		$	5,390		
Ultramax		 	4,825		
Supramax		 	4,620		

Based on these average daily budgeted amounts by vessel type, we expect our fleet to have average daily vessel operating expenses of $5,000 during 2021, reflecting our exit from the smaller, Handysize vessels and the greater weighting of our fleet towards Capesize vessels as well as an anticipated increase in COVID-19 related expenses, as well as higher crew costs and stores. The potential impacts of COVID-19 are beyond our control and are difficult to predict due to uncertainties surrounding the pandemic.

CHARTER HIRE EXPENSES-

Charter hire expenses decreased by $5.9 million from $16.2 million during 2019 to $10.3 million during 2020.  The decrease was primarily due to fewer chartered-in days, as well as the chartering in of smaller class vessels during 2020 as compared to 2019.

GENERAL AND ADMINISTRATIVE EXPENSES-

We incur general and administrative expenses which relate to our onshore non-vessel-related activities. Our general and administrative expenses include our payroll expenses, including those relating to our executive officers, rent, legal, auditing and other professional expenses. General and administrative expenses include nonvested stock
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amortization expense which represent the amortization of stock-based compensation that has been issued to our Directors and employees pursuant to the 2015 Equity Incentive Plan. Refer to Note 16 — Stock-Based Compensation in our Consolidated Financial Statements. General and administrative expenses also include legal and professional fees associated with our credit facilities, which are not capitalizable to deferred financing costs. We incurred additional general and administrative expenses during 2019 as a result of our global expansion to Singapore and Copenhagen and have incurred additional expenses related to these overseas offices during 2020.

General and administrative expenses decreased by $3.3 million from $24.5 million during 2019 to $21.3 million during 2020. The decrease was primarily due to lower office rent and administrative expenses, as well as lower travel expenses and legal and professional fees.

TECHNICAL MANAGEMENT FEES-

We incur management fees to third party technical management companies for the day-to-day management of our vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.
 
For the years ended December 31, 2020 and 2019, technical management fees were $7.0 million and $7.6 million, respectively.  The decrease was a result of fewer owned vessels during 2020 as compared to 2019.

DEPRECIATION AND AMORTIZATION-

We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years and we estimate the residual value by taking the estimated scrap value of $310 per lightweight ton multiplied by the weight of the ship in lightweight tons.

Depreciation and amortization expenses decreased by $7.7 million from $72.8 million during 2019 to $65.2 million during 2020. This decrease was primarily due to a decrease in depreciation for the twelve vessels that were sold during the fourth quarter of 2019 and 2020, as well as a decrease in depreciation for certain vessels in our fleet that were impaired during 2020. These decreases were partially offset by an increase in depreciation expense related to scrubber additions for our Capesize vessels.‌

IMPAIRMENT OF VESSEL ASSETS-

During 2020 and 2019, we recorded $208.9 million and $27.4 million of impairment of vessel assets, respectively. During 2020, we recorded impairment losses for 20 of our Supramax vessels and ten of our Handysize vessels. During 2019, we recorded impairment losses for three of our Handysize vessels and two of our Panamax vessels.

Refer to Note 2 — Summary of Significant Accounting Policies in our Consolidated Financial Statements for further information.

LOSS ON SALE OF VESSELS-

During 2020, we recorded a $1.9 million net loss on sale of vessels related primarily to the sale of the Genco Charger, Genco Thunder, Baltic Wind, Baltic Breeze, Genco Bay, Baltic Jaguar, Genco Loire, Genco Normandy and Genco Ocean. During 2019, we recorded a $0.2 million net loss on sale of vessels related primarily to the sale of the Genco Challenger, Genco Champion and Genco Raptor, which was largely offset by a net gain related to the sale of the Genco Vigour.

OTHER (EXPENSE) INCOME-

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NET INTEREST EXPENSE-

Net interest expense decreased by $6.5 million to $21.4 million during 2020 as compared to $27.9 million during 2019.  Net interest expense during the years ended December 31, 2020 and 2019 consisted of interest expense under our credit facilities and amortization of deferred financing costs for those facilities. The decrease is primarily due to a $9.5 million decrease in interest expense as a result of lower interest rates, as well as lower outstanding debt. This was offset by a $3.1 million decrease in interest income due to a decrease in interest earned on our time deposits and cash accounts. Refer to Note 7 — Debt in the Consolidated Financial Statements for information regarding our credit facilities.

IMPAIRMENT OF RIGHT-OF-USE ASSET –
 
During 2019, we recognized $0.2 million of impairment charges on our operating lease right-of-use asset in accordance with ASC 360.  Refer to Note 13 — Leases in our Consolidated Financial Statements for further information.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash flow from operations, cash on hand, equity offerings and credit facility borrowings. We currently use our funds primarily for the acquisition of vessels generally and under our ongoing fleet renewal program, drydocking for our vessels, and satisfying working capital requirements as may be needed to support our business and make required payments under our indebtedness.  Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, shipping industry conditions, the financial condition of our customers, vendors and service providers, our ability to comply with the financial and other covenants of our indebtedness, and other factors.  

We believe, given our current cash holdings, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the year, are sufficient to fund our operations for at least the next twelve months. Such resources include unrestricted cash and cash equivalents of $143.9 million as of December 31, 2020, which compares to a minimum liquidity requirement under our credit facilities of approximately $34 million as of the date of this report. Given quarterly amortization payments of $20.2 million which began on December 31, 2020 under our credit facilities, anticipated capital expenditures related to drydockings and the installation of ballast water treatment systems (“BWTS”), as well as any quarterly dividend payments, we anticipate to continue to have significant cash expenditures. However, if market conditions were to worsen significantly due to the current COVID-19 pandemic or other causes, then our cash resources may decline to a level that may put at risk our ability to service timely our debt and capital expenditure commitments.
 
Our credit facilities contain collateral maintenance covenants that require the aggregate appraised value of collateral vessels to be at least 135% of the principal amount of the loan outstanding under each such facility. If the values of our vessels were to decline as a result of COVID-19 or otherwise, we may not satisfy this collateral maintenance requirement. Outstanding borrowings under our revolving credit facility, which total $21.2 million as of December 31, 2020, make it more difficult to satisfy the collateral maintenance requirement under our $133 Million Credit Facility. If we do not satisfy the collateral maintenance requirement, we will need to post additional collateral or prepay outstanding loans to bring us back into compliance, or we will need to seek waivers, which may not be available or may be subject to conditions.

In the future, we may require capital to fund acquisitions or to improve or support our ongoing operations and debt structure, particularly in light of economic conditions resulting from the ongoing COVID-19 pandemic.  We may from time to time seek to raise additional capital through equity or debt offerings, selling vessels or other assets, pursuing strategic opportunities, or otherwise.  We may also from time to time seek to incur additional debt financing from private or public sector sources, refinance our indebtedness or obtain waivers or modifications to our credit agreements to obtain more favorable terms, enhance flexibility in conducting our business, or otherwise.  We may also seek to manage our interest rate exposure through hedging transactions. We may seek to accomplish any of these independently or in conjunction with one or more of these actions.  However, if market conditions are unfavorable, we may be unable to accomplish any of the foregoing on acceptable terms or at all.
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We entered into the $495 Million Credit Facility on May 31, 2018, which was initially used to refinance our prior credit facilities: the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities on June 5, 2018 and originally allowed borrowings of up to $460 million. On February 28, 2019, we entered into an amendment to the $495 Million Credit Facility that provides for an additional tranche of up to $35 million to finance a portion of the acquisitions, installations, and related costs for exhaust cleaning systems (or “scrubbers”) for 17 of the Company’s Capesize vessels. On June 5, 2020, we entered into an amendment to the $495 Million Credit Facility to extend the period that collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral from 180 days to 360 days. On December 17, 2020, we entered into an amendment to the $495 Million Credit Facility that allowed us to enter into a vessel transaction in which we agreed to acquire three modern Ultramax vessels in exchange for six of our older Handysize vessels.

We entered into the $133 Million Credit Facility on August 14, 2018, which was initially used to finance a portion of the purchase price for the six vessels that were purchased during the third quarter of 2018 and originally allowed borrowings of up to $108 million. On June 11, 2020, we entered into an amendment to the $133 Million Credit Facility that provides us with a $25 million revolving credit facility to be used for general corporate and working capital purposes. Refer to Note 7 — Debt in our Consolidated Financial Statements.

As of December 31, 2020, we were in compliance with all financial covenants under the $495 Million Credit facility and the $133 Million Credit Facility.

Dividends

Our Board of Directors adopted a quarterly dividend policy following the third quarter of 2019 to pay a dividend of $0.175 per share. In light of market weakness and heightened economic uncertainty as a result of the COVID-19 pandemic, in May 2020, our Board of Directors determined following its quarterly review that it would be prudent to reduce our regular quarterly dividend beginning in the first quarter of 2020 to $0.02 per share in order to support our balance sheet and liquidity position and better position us for an eventual economic recovery. Furthermore, our Board of Directors determined to maintain this dividend level for the fourth quarter of 2020, as we announced a quarterly dividend of $0.02 per share on February 24, 2021. Our Board expects to reassess the payment of dividends as appropriate from time to time. Our declaration and payment of dividends is subject to a number of conditions and restrictions as described below.   

 On November 5, 2019, we entered into amendments with our lenders to the dividend covenants of the credit agreements for our $495 Million Credit Facility and our $133 Million Credit Facility.  Under the terms of these two facilities as so amended, dividends or repurchases of our stock are subject to customary conditions.  We may pay dividends or repurchase stock under these facilities to the extent our total cash and cash equivalents are greater than $100 million and 18.75% of our total indebtedness, whichever is higher; if we cannot satisfy this condition, we are subject to a limitation of 50% of consolidated net income for the quarter preceding such dividend payment or stock repurchase if the collateral maintenance test ratio is 200% or less for such quarter, for which purpose the full commitment of up to $35 million of our new scrubber tranche is assumed to be drawn. As of December 31, 2020, we had unrestricted cash and cash equivalents of $143.9 million. We have commitments for amortization payments expected to be $20.2 million which began on December 31, 2020 under our credit facilities. Therefore, if we do not generate cash flow from operations, we would be unlikely to be able to declare or pay dividends in the future, except to the extent of permissible dividends from net income.

The declaration and payment of any dividend or any stock repurchase is subject to the discretion of our Board of Directors. Our Board of Directors and management continue to closely monitor market developments together with the evaluation of our quarterly dividend policy in the current market environment. The principal business factors that our Board of Directors expects to consider when determining the timing and amount of dividend payments or stock repurchases include our earnings, financial condition, and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends or stock repurchases other than from surplus. Marshall Islands law also prohibits the declaration and payment of dividends or stock repurchases while a company is insolvent or would be rendered insolvent by the payment of such a dividend or such a stock repurchase. Heightened economic uncertainty and
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the potential for renewed drybulk market weakness as a result of the COVID-19 pandemic and related economic conditions may result in our suspension, reduction, or termination of future quarterly dividends.  

U.S. Federal Income Tax Treatment of Dividends
 
U.S. Holders

For purposes of this discussion, the term "U.S. Holder" means a beneficial owner of our common stock that is, for U.S. federal income tax purposes, (i) an individual U.S. citizen or resident, (ii) a corporation that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia, or any other U.S. entity taxable as a corporation, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if either (x) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (y) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. If a partnership, or an entity treated for U.S. federal income tax purposes as a partnership, such as a limited liability company, holds common stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership. If you are a partner in such a partnership holding our common stock, you are encouraged to consult your tax advisor. A beneficial owner of our common stock (other than a partnership) that is not a U.S. Holder is referred to below as a "Non-U.S. Holder."
 
Subject to the discussion of passive foreign investment company (PFIC) status on pages 33 - 34 above, any distributions made by us to a U.S. Holder with respect to our common shares generally will constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of those earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder's tax basis in our common shares (determined on a share-by-share basis), and thereafter as capital gain. U.S. Holders that own at least 10% of our shares may be able to claim a dividends-received-deduction and should consult their tax advisors.
 
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, or a "non-corporate U.S. Holder," will generally be treated as "qualified dividend income" that is taxable to such non-corporate U.S. Holder at preferential tax rates, provided that (1) our common shares are readily tradable on an established securities market in the United States (such as the NYSE, on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we have been, are, or will be); (3) the non-corporate U.S. Holder's holding period of our common shares includes more than 60 days in the 121-day period beginning 60 days before the date on which our common shares becomes ex-dividend; and (4) the non-corporate U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. A non-corporate U.S. Holder will be able to take qualified dividend income into account in determining its deductible investment interest (which is generally limited to its net investment income) only if it elects to do so; in such case, the dividend will be taxed at ordinary income rates. Non-corporate U.S. Holders also may be required to pay a 3.8% surtax on all or part of such holder's "net investment income," which includes, among other items, dividends on our shares, subject to certain limitations and exceptions. Investors are encouraged to consult their own tax advisors regarding the effect, if any, of this surtax on their ownership of our shares.
 
Amounts taxable as dividends generally will be treated as passive income from sources outside the U.S. However, if (a) we are 50% or more owned, by vote or value, by U.S. Holders and (b) at least 10% of our earnings and profits are attributable to sources within the U.S., then for foreign tax credit purposes, a portion of our dividends would be treated as derived from sources within the U.S. With respect to any dividend paid for any taxable year, the U.S. source ratio of our dividends for foreign tax credit purposes would be equal to the portion of our earnings and profits from sources within the U.S. for such taxable year divided by the total amount of our earnings and profits for such taxable year. The rules related to U.S. foreign tax credits are complex and U.S. Holders should consult their tax advisors to determine whether and to what extent a credit would be available.
 
Special rules may apply to any "extraordinary dividend" — generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted basis (or fair market value in certain circumstances) in a share of our
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common shares — paid by us. If we pay an "extraordinary dividend" on our common shares that is treated as "qualified dividend income", then any loss derived by a non-corporate U.S. Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of such dividend.
 
Tax Consequences if We Are a Passive Foreign Investment Company

As discussed in “U.S. tax authorities could treat us as a ‘passive foreign investment company,’ which could have adverse U.S. federal income tax consequences to U.S. shareholders” in Item 1.A Risk Factors above, a foreign corporation generally will be treated as a PFIC for U.S. federal income tax purposes if, after applying certain look through rules, either (1) at least 75% of its gross income for any taxable year consists of “passive income” or (2) at least 50% of the average value or adjusted bases of its assets (determined on a quarterly basis) produce or are held for the production of passive income, i.e., “passive assets.”  As discussed above, we do not believe that our past or existing operations would cause, or would have caused, us to be deemed a PFIC with respect to any taxable year.  No assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC.  Moreover, there can be no assurance that we will not become a PFIC in any future taxable year because the PFIC test is an annual test, there are uncertainties in the application of the PFIC rules, and although we intend to manage our business so as to avoid PFIC status to the extent consistent with our other business goals, there could be changes in the nature and extent of our operations in future taxable years.

If we were to be treated as a PFIC for any taxable year in which a U.S. Holder owns shares of our common stock (and regardless of whether we remain a PFIC for subsequent taxable years), the tax consequences to such a U.S. holder upon the receipt of  distributions in respect of such shares that are treated as “excess distributions” would differ from those described above. In general, an excess distribution is the amount of distributions received during a taxable year that exceed 125% of the average amount of distributions received by a U.S. Holder in respect of the common shares during the preceding three taxable years, or if shorter, during the U.S. Holder’s holding period prior to the taxable year of the distribution. The distributions that are excess distributions would be allocated ratably over the U.S. Holder’s holding period for the common shares. The amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we were a PFIC would be taxed as ordinary income. The amount allocated to each of the other taxable years would be subject to tax at the highest marginal rate in effect for the U.S. Holder for that taxable year, and an interest charge for the deemed deferral benefit would be imposed on the resulting tax allocated to such other taxable years. The tax liability with respect to the amount allocated to taxable years prior to the year of the distribution cannot be offset by net operating losses. As an alternative to such tax treatment, a U.S. Holder may make a “qualified electing fund” election or “mark to market” election, to the extent available, in which event different rules would apply.  The U.S. federal income tax consequences to a U.S. Holder if we were to be classified as a PFIC are complex. A U.S. Holder should consult with his or her own advisor with regard to those consequences, as well as with regard to whether he or she is eligible to and should make either of the elections described above.

Non-U.S. Holders

Non-U.S. Holders generally will not be subject to U.S. federal income tax on dividends received from us on our common shares unless the income is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States (“effectively connected income”) (and, if an applicable income tax treaty so provides, the dividends are attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.).  Effectively connected income (or, if an income tax treaty applies, income attributable to a permanent establishment maintained in the U.S.) generally will be subject to regular U.S. federal income tax in the same manner discussed above relating to taxation of U.S. Holders. In addition, earnings and profits of a corporate Non-U.S. Holder that are attributable to such income, as determined after allowance for certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty. Non-U.S. Holders may be subject to tax in jurisdictions other than the United States on dividends received from us on our common shares.
 
Dividends paid on our common shares to a non-corporate U.S. Holder may be subject to U.S. federal backup withholding tax if the non-corporate U.S. Holder:

	●	fails to provide us with an accurate taxpayer identification number;	
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	●	is notified by the IRS that they have become subject to backup withholding because they previously failed to report all interest or dividends required to be shown on their federal income tax returns; or	
	●	fails to comply with applicable certification requirements.	

A holder that is not a U.S. Holder or a partnership may be subject to U.S. federal backup withholding with respect to such dividends unless the holder certifies that it is a non-U.S. person, under penalties of perjury, or otherwise establishes an exemption therefrom.  Backup withholding tax is not an additional tax. Holders generally may obtain a refund of any amounts withheld under backup withholding rules that exceed their income tax liability by timely filing a refund claim with the IRS.
 
You are encouraged to consult your own tax advisor concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local, or foreign law from the payment of dividends on our common stock.

Cash Flow

Net cash provided by operating activities for the years ended December 31, 2020 and 2019 was $36.9 million and $59.5 million, respectively.  This decrease in cash provided by operating activities was primarily due to changes in working capital, offset by a decrease in drydocking related expenditures.  

Net cash provided by investing activities during the year ended December 31, 2020 was $37.4 million as compared to $22.8 million net cash used in investing activities during the year ended December 31, 2019.  This fluctuation was primarily due to an increase in net proceeds from the sale of vessels in 2020 as compared to 2019, as well as a decrease in scrubber and ballast water treatment system related expenditures. 

Net cash used in financing activities during the years ended December 31, 2020 and 2019 was $56.9 million and $77.2 million, respectively.  The decrease was primarily due to the $24.0 million drawdown on the $133 Million Credit Facility during 2020 and an $11.0 million decrease in the payment of dividends during 2020 as compared to 2019. These decreases were partially offset by a $10.3 million decrease in drawdowns under the $495 Million Credit Facility, as well as a $2.8 million and a $1.9 million increase in repayments under the $133 Million Credit Facility and $495 Million Credit Facility, respectively, during 2020 as compared to 2019.
 
Credit Facilities

We entered into the $133 Million Credit Facility on August 14, 2018, which was initially used to finance a portion of the purchase price for the six vessels that were purchased during the third quarter of 2018. On June 11, 2020, we entered into an amendment to the $133 Million Credit Facility which provided us with a $25 million revolving credit facility to be used for general corporate and working capital purposes. Additionally, we entered into the $495 Million Credit Facility on May 31, 2018, which was initially used to refinance our prior credit facilities. On February 28, 2019, we entered into an amendment to the $495 Million Credit Facility, which provides for an additional tranche of up to $35 million to finance a portion of the acquisitions, installations, and related costs for exhaust cleaning systems (or “scrubbers”) for 17 of our Capesize vessels. On June 5, 2020, we entered into an amendment to the $495 Million Credit Facility to extend the period that collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral from 180 days to 360 days. On December 17, 2020, we entered into an amendment to the $495 Million Credit Facility that allowed us to enter into a vessel transaction in which we agreed to acquire three modern Ultramax vessels in exchange for six of our older Handysize vessels.

Refer to Note 7 — Debt in our Consolidated Financial Statements for information regarding our current credit facilities, including the underlying financial and non-financial covenants.

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Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements

As of December 31, 2020 and 2019, we did not have any interest rate swap agreements. As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates. In determining the fair value of interest rate derivatives, we would consider the creditworthiness of both the counterparty and ourselves, which in the past, have resulted in an immaterial adjustment. Valuations prior to any adjustments for credit risk would be validated by comparison with counterparty valuations. Amounts would not and should not be identical due to the different modeling assumptions. Any material differences would be investigated.

As part of our business strategy, we may enter into arrangements commonly known as forward freight agreements, or FFAs, to hedge and manage our exposure to the charter market risks relating to the deployment of our vessels.  Generally, these arrangements would bind us and each counterparty in the arrangement to buy or sell a specified tonnage freighting commitment “forward” at an agreed time and price and for a particular route.  Upon settlement, if the contracted charter rate is less than the average of the rates (as reported by an identified index) for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate multiplied by the number of days in the specific period.  Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum.  Although FFAs can be entered into for a variety of purposes, including for hedging, as an option, for trading or for arbitrage, if we decided to enter into FFAs, our objective would be to hedge and manage market risks as part of our commercial management. It is not currently our intention to enter into FFAs to generate a stream of income independent of the revenues we derive from the operation of our fleet of vessels.  If we determine to enter into FFAs, we may reduce our exposure to any declines in our results from operations due to weak market conditions or downturns, but may also limit our ability to benefit economically during periods of strong demand in the market.  We have not entered into any FFAs as of December 31, 2020 and 2019.

Interest Rates

The effective interest rate for the years ended December 31, 2020, 2019 and 2018 include interest rates associated with the interest expense for our various credit facilities including the following: the $133 Million Credit Facility; the $495 Million Credit Facility; the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities (until these facilities were refinanced with the $495 Million Credit Facility on June 5, 2018).

The effective interest rate for the aforementioned credit facilities, including the cost associated with unused commitment fees, if applicable, was 3.71%, 5.31% and 5.71% during 2020, 2019 and 2018, respectively.  The interest rate on the debt, excluding unused commitment fees, ranged from 2.65% to 3.50%; 4.05% to 5.76% and 3.83% to 8.43% during 2020, 2019 and 2018, respectively.

Contractual Obligations

The following table sets forth our contractual obligations and their scheduled maturity dates as of December 31, 2020.  The table incorporates the employment agreement entered into in September 2007 with our Chief Executive Officer and President, John C. Wobensmith, as amended.  The interest and borrowing fees and scheduled credit agreement payments below reflect the $495 Million Credit Facility and the $133 Million Credit Facility, as well as other fees associated with the facilities.  The following table also incorporates the future lease payments associated with our office leases. Refer to Note 13 — Leases in our Consolidated Financial Statements for further information regarding the terms of our lease agreements.  Lastly, the table incorporates the remaining contractual purchase obligations for the purchase of ballast water treatment systems for 11 of our vessels, refer to “Capital Expenditures” below for further
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information.  All of our time charter-in agreements with third parties are less than twelve months and have not been included below. 

	    			    	Less Than	    	One to	    	Three to	    			 	
					One		Three		Five		More than	 	
		Total		Year (1)		Years		Years		Five Years	 	
	
		(U.S. dollars in thousands)	 	
Credit Agreements	    	$	449,228	    	$	80,642	    	$	368,586		$	—	    	$	—	 	
Interest and borrowing fees		 	28,617		 	13,521			15,096			—		 	—		
Ballast water treatment system obligations			5,336			3,780			1,556			—			—		
Executive employment agreement		 	467		 	467		 	—		 	—		 	—		
Office leases		 	11,130		 	2,230		 	4,608			4,292			—		
Totals		$	494,778		$	100,640		$	389,846		$	4,292		$	—		

Interest expense has been estimated using 0.13% based on one-month LIBOR plus the applicable margin of 3.25% for the $460 million tranche of the $495 Million Credit Facility; 2.50% for the $35 million tranche of the $495 Million Credit Facility; 2.50% for the $108 million tranche of the $133 Million Credit Facility; and 3.00% for the $25 million tranche of the $133 Million Credit Facility.

Capital Expenditures

We make capital expenditures from time to time in connection with our vessel acquisitions.  After the sale of two Supramax vessels, our fleet will consist of 39 drybulk vessels, including 17 Capesize drybulk carriers, nine Ultramax drybulk carriers and thirteen Supramax drybulk carriers.

As previously announced, we have initiated a fuel efficiency upgrade program for certain of our vessels in an effort to generate fuel savings and increase the future earnings potential for these vessels. The upgrades have been successfully installed on 22 of our vessels in the aggregate during previous drydockings.

Under U.S. Federal law and 33 CFR, Part 151, Subpart D, U.S. approved BWTS will be required to be installed in all vessels at the first out of water drydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the U.S. U.S. authorities did not approve ballast water treatment systems until December 2016. Therefore, the U.S. Coast Guard (“USCG”) has granted us extensions for our vessels with 2016 drydocking deadlines until January 1, 2018; however, an alternative management system (“AMS”) may be installed in lieu. For example, in February 2015, the USCG added Bawat to the list of ballast water treatment systems that received AMS acceptance. An AMS is valid for five years from the date of required compliance with ballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval. Furthermore, we received extensions for vessels drydocking in 2016 that allowed for further extensions to the vessels’ next scheduled drydockings in year 2021.  Additionally, for our vessels that were scheduled to drydock in 2017 and 2018, the USCG has granted an extension that enables us to defer installation to the next scheduled out of water drydocking.  Any newbuilding vessels that we acquire will have a USCG approved system or at least an AMS installed when the vessel is being built.
 
In addition, on September 8, 2016, the Ballast Water Management (“BWM”) Convention was ratified and had an original effective date of September 8, 2017.  However, on July 7, 2017, the effective date of the BWM Convention was extended two years to September 8, 2019 for existing ships.  This will require vessels to have a BWTS installed to coincide with the vessels’ next International Oil Pollution Prevention Certificate (“IOPP”) renewal survey after September 8, 2019.   In order for a vessel to trade in U.S. waters, it must be compliant with the installation date as required by the USCG as outlined above. 
 
During the second half of 2018, we have entered into agreements for the purchase of BWTS for 36 of our vessels.  The cost of these systems will vary based on the size and specifications of each vessel and whether the systems will be installed in China.  Based on the contractual purchase price of the BWTS and the estimated installation fees, the Company estimates the cost of the systems to be approximately $0.9 million for Capesize, $0.6 million for Supramax
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and $0.5 million for Handysize vessels. The BWTS will be installed during a vessel’s scheduled drydocking and these costs will be capitalized and depreciated over the remainder of the life of the vessel.  During 2020 and 2019, we completed the installation of BWTS on nine and 17 of our vessels, respectively. Eight of these vessels have since been sold. We anticipate that we will complete the installation of BWTS on five vessels during 2021 and five vessels during 2022. We intend to fund the remaining BWTS purchase price and installation fees using cash on hand.  
 
Under maritime regulations that went into effect January 1, 2020, our vessels were required to reduce sulfur emissions, for which the principal solutions are the use of scrubbers or buying fuel with low sulfur content.  We have completed the installation of scrubbers on our 17 Capesize vessels, 16 of which were completed as of December 31, 2019 and the last one of which was completed on January 17, 2020. The remainder of our vessels are consuming VLSFO.  The costs for the scrubber equipment and installation will be capitalized and depreciated over the remainder of the life of the vessel.  This does not include any lost revenue associated with offhire days due to the installation of the scrubbers.  During February 2019, we entered into an amendment to our $495 Million Credit Facility for an additional tranche of up to $35 million to cover a portion of the expenses to the acquisition and installation of scrubbers on our 17 Capesize vessels.  We have funded the remainder of the costs with cash on hand.   For vessels on which we did not install scrubbers, we incurred additional costs during 2019 in order to transition these vessels from high sulfur fuel to compliant low sulfur fuel.

In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet.  Through December 31, 2020, we have paid $42.7 million in cash installments towards our scrubber program and have drawn down $32.8 million under the scrubber tranche under our $495 Million Credit Facility.

We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, BWTS costs and scheduled off-hire days for our fleet through 2022 to be:

Year	    	Estimated Drydocking 
Cost (1)		Estimated BWTS
Cost (2)	    	Estimated Off-hire 
Days (3)	 	
	
		(U.S. dollars in millions)			 	
										
2021		$	7.7		$	4.0		170		
2022		$	7.5		$	4.0		185		

The costs reflected are estimates based on drydocking our vessels in China.  Actual costs will vary based on various factors, including where the drydockings are actually performed.  We expect to fund these costs with cash on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses.

Actual length of drydocking will vary based on the condition of the vessel, yard schedules and other factors. Higher repairs and maintenance expenses during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the condition of the vessel.

During 2020 and 2019, we incurred a total of $8.6 million and $14.6 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.

Fourteen vessels completed their respective drydockings during 2020, which included one vessel that began its drydocking during the fourth quarter of 2019. We estimate that eight of our vessels will be drydocked during 2021 and seven of our vessels will be drydocked during 2022. 
 
As of January 17, 2020, we have completed the installation of scrubbers on our 17 Capesize vessels.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Inflation

Inflation has only a moderate effect on our expenses given current economic conditions.  In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, general and administrative, and financing costs.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements.  Actual results may differ from these estimates under different assumptions and conditions.

Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions.  We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application.  For an additional description of our significant accounting policies, see Note 2 to our Consolidated Financial Statements included in this 10-K.

Vessels and Depreciation

We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation.  We depreciate our drybulk vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard.  Depreciation is based on cost less the estimated residual scrap value of $310/lwt based on the 15-year average scrap value of steel.  An increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessels. Similarly, an increase in the useful life of a drybulk vessel would also decrease the annual depreciation charge.  Comparatively, a decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use.

The carrying value of each of our vessels does not represent the fair market value of such vessel or the amount we could obtain if we were to sell any of our vessels, which could be more or less.  Under U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed below under the heading “Impairment of long-lived assets.”

During the years ended December 31, 2020, 2019 and 2018, we recorded losses of $208.9 million, $27.4 million and $56.6 million related to the impairment of our vessel assets.  During the year ended December 31, 2020, we recorded impairment for 20 of our Supramax vessels (the Genco Loire, the Genco Lorraine, the Genco Normandy, the Genco Picardy, the Genco Predator, the Genco Provence, the Genco Warrior, the Baltic Cougar, the Baltic Jaguar, the Baltic Leopard, the Baltic Panther, the Genco Aquitaine, the Genco Ardennes, the Genco Auvergne, the Genco Bourgogne, the Genco Brittany, the Genco Hunter, the Genco Languedoc, the Genco Pyrenees and the Genco Rhone) and ten of our Handysize vessels (the Genco Avra, the Genco Bay, the Genco Mare, the Genco Ocean, the Genco Spirit, the Baltic Breeze, the Baltic Cove, the Baltic Fox, the Baltic Hare and the Baltic Wind). During the year ended
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December 31, 2019, we recorded impairment for two of our Panamax vessels (the Genco Raptor and Genco Thunder) and three of our Handysize vessels (the Genco Challenger, the Genco Champion and the Genco Charger). During the year ended December 31, 2018, we recorded impairment for one of our Panamax vessels (the Genco Surprise), one of our Handymax vessels (the Genco Muse), and eight of our Supramax vessels (the Genco Cavalier, the Genco Loire, the Genco Lorraine, the Genco Normandy, the Baltic Cougar, the Baltic Jaguar, the Baltic Leopard and the Baltic Panther). Refer to Note 2 — Summary of Significant Accounting Policies in our Consolidated Financial Statements for further information regarding the impairment recorded during the years ended December 31, 2020, 2019 and 2018.

Pursuant to our credit facilities, we regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our bank credit facilities.  Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such.  We were in compliance with the collateral maintenance covenant under our $495 Million Credit Facility and $133 Million Credit Facility as of December 31, 2020. Refer to Note 7 — Debt in our Consolidated Financial Statements for additional information. We obtained valuations for all of the vessels in our fleet pursuant to the terms of the $495 Million Credit Facility and the $133 Million Credit Facility. In the chart below, we list each of our vessels, the year it was built, the year we acquired it, and its carrying value as of December 31, 2020 and 2019. Vessels have been grouped according to their collateralized status as of December 31, 2020 and does not include any vessels held for sale or held for exchange. The carrying value of 15 Supramax vessels as noted above reflect the impairment loss recorded during 2020 for these vessels (the Genco Lorraine, the Genco Picardy, the Genco Predator, the Genco Provence, the Genco Warrior, the Baltic Leopard, the Genco Aquitaine, the Genco Ardennes, the Genco Auvergne, the Genco Bourgogne, the Genco Brittany, the Genco Hunter, the Genco Languedoc, the Genco Pyrenees and the Genco Rhone). The carrying value of the Genco Charger as of December 31, 2019 reflects the impairment loss recorded during 2019 for this vessel.

As of December 31, 2020, the vessel valuations of all of our vessels for covenant compliance purposes under our credit facilities as of the most recent compliance testing date were lower than their carrying values as of December 31, 2020, with the exception of nine of the Supramax vessels that were impaired as of December 31, 2020 (the Genco Aquitaine, the Genco Ardennes, the Genco Auvergne, the Genco Bourgogne, the Genco Brittany, the Genco Hunter, the Genco Languedoc, the Genco Pyrenees and the Genco Rhone) and the Genco Magic that was acquired on December 23, 2020. As of December 31, 2019, the vessel valuations of all of our vessels for covenant compliance purposes under our credit facility as of the most recent compliance testing date were lower than their carrying values as of December 31, 2019, with the exception of the Genco Charger, which was impaired during the year ended December 31, 2019.

The amount by which the carrying value as of December 31, 2020 of all of the vessels in our fleet, with the exception of the ten aforementioned vessels, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual basis, from $0 million to $18.3 million per vessel, and $260.8 million on an aggregate fleet basis. The amount by which the carrying value as of December 31, 2019 of all of the vessels in our fleet, with the exception of the Genco Charger, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual basis, from $1.6 million to $18.1 million per vessel, and $418.1 million on an aggregate fleet basis. The average amount by which the carrying value of these vessels exceeded the valuation of such vessels for covenant compliance purposes was $9.0 million and $7.9 million as of December 31, 2020 and 2019, respectively. However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters, if any, related to some of our vessels.

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						Carrying Value (U.S.	 	
						dollars in	 	
						thousands) as of	 	
	    		    	Year	    	December 31, 	    	December 31, 	 	
Vessels	    	Year Built	    	Acquired	    	2020	    	2019	 	
$495 Million Credit Facility												
Genco Commodus	 	2009	 	2009		$	37,356		$	39,472		
Genco Maximus	 	2009	 	2009		 	37,355		 	39,498		
Genco Claudius		2010	 	2009		 	39,091		 	41,314		
Baltic Bear	 	2010	 	2010			38,813			40,967		
Baltic Wolf	 	2010	 	2010		 	39,050		 	41,163		
Baltic Lion	 	2009	 	2013		 	30,811		 	32,199		
Genco Tiger		2010		2013			29,020			30,115		
Baltic Scorpion	 	2015	 	2015		 	24,520		 	25,583		
Baltic Mantis	 	2015	 	2015		 	24,768		 	25,835		
Genco Hunter	 	2007	 	2007	 		8,250	 		17,121		
Genco Warrior	 	2005	 	2007	 		7,422	 		15,053		
Genco Aquitaine	 	2009	 	2010		 	9,000		 	17,046		
Genco Ardennes	 	2009	 	2010		 	9,000		 	17,080		
Genco Auvergne	 	2009	 	2010		 	9,000		 	17,094		
Genco Bourgogne	 	2010	 	2010		 	9,750		 	17,802		
Genco Brittany	 	2010	 	2010		 	9,750		 	17,829		
Genco Languedoc	 	2010	 	2010		 	9,750		 	17,609		
Genco Loire	 	2009	 	2010		 	—		 	10,777		
Genco Lorraine	 	2009	 	2010		 	7,751		 	10,748		
Genco Normandy	 	2007	 	2010		 	—		 	8,717		
Baltic Leopard	 	2009	 	2009		 	7,840		 	10,773		
Baltic Jaguar	 	2009	 	2010		 	—		 	10,782		
Baltic Panther	 	2009	 	2010		 	—		 	10,784		
Baltic Cougar	 	2009	 	2010		 	—		 	10,791		
Genco Picardy	 	2005	 	2010		 	7,890		 	14,669		
Genco Provence	 	2004	 	2010		 	6,930		 	14,164		
Genco Pyrenees	 	2010	 	2010		 	9,750		 	17,528		
Genco Rhone	 	2011	 	2011		 	10,625		 	18,610		
Genco Bay	 	2010	 	2010		 	—		 	16,411		
Genco Ocean	 	2010	 	2010		 	—		 	16,562		
Genco Avra	 	2011	 	2011		 	—		 	17,505		
Genco Mare	 	2011	 	2011		 	—		 	17,546		
Genco Spirit	 	2011	 	2011		 	—		 	17,614		
Baltic Wind	 	2009	 	2010		 	—		 	15,996		
Baltic Cove	 	2010	 	2010		 	—		 	16,490		
Baltic Breeze	 	2010	 	2010		 	—		 	16,603		
Baltic Fox	 	2010	 	2013		 	—		 	15,995		
Baltic Hare	 	2009	 	2013		 	—		 	15,395		
Genco Constantine	 	2008	 	2008		 	34,179		 	36,450		
Genco Augustus	 	2007	 	2007		 	32,049		 	34,330		
Genco London	 	2007	 	2007		 	31,587		 	33,600		
Genco Titus	 	2007	 	2007		 	32,306		 	33,590		
Genco Tiberius	 	2007	 	2007		 	32,007		 	34,276		
Genco Hadrian	 	2008	 	2008		 	34,633		 	36,638		
Genco Predator	 	2005	 	2007		 	7,816		 	14,846		
Genco Charger	 	2005	 	2007		 	—		 	5,099		
Baltic Hornet	 	2014	 	2014		 	23,055		 	24,086		
Baltic Wasp	 	2015	 	2015		 	23,308		 	24,340		
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						Carrying Value (U.S.	 	
						dollars in	 	
						thousands) as of	 	
	    		    	Year	    	December 31, 	    	December 31, 	 	
Vessels	    	Year Built	    	Acquired	    	2020	    	2019	 	
Genco Magic		2014		2020			14,683			—		
TOTAL						$	689,115		$	1,034,495		
												
$133 Million Credit Facility												
Genco Endeavour		2015		2018		 	44,069		 	45,947		
Genco Resolute		2015		2018		 	44,320		 	46,093		
Genco Columbia		2016		2018		 	25,553		 	26,627		
Genco Weatherly		2014		2018		 	20,740		 	21,676		
Genco Liberty		2016		2018		 	47,676		 	49,506		
Genco Defender		2016		2018		 	47,641		 	49,517		
						$	229,999		$	239,366		
												
Consolidated Total						$	919,114		$	1,273,861		

If we were to sell a vessel or hold a vessel for sale, and the carrying value of the vessel were to exceed its fair market value, net of commission, we would record a loss in the amount of the difference. Refer to Note 2 — Summary of Significant Accounting Policies and Note 4 — Vessel Acquisitions and Dispositions in our Consolidated Financial Statements for information regarding the sale of vessel assets and the classification of vessel assets held for sale and exchange as of December 31, 2020 and 2019.

Deferred drydocking costs

Our vessels are required to be drydocked approximately every 30 to 60 months for major repairs and maintenance that cannot be performed while the vessels are operating.  We defer the costs associated with drydockings as they occur and amortize these costs on a straight-line basis over the period between drydockings.  Deferred drydocking costs include actual costs incurred at the drydock yard; cost of travel, lodging and subsistence of our personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee the drydocking.  We believe that these criteria are consistent with U.S. GAAP guidelines and industry practice and that our policy of deferral reflects the economics and market values of the vessels.  Costs that are not related to drydocking, including routine maintenance and repairs, are expensed as incurred.  If the vessel is drydocked earlier than originally anticipated, any remaining deferred drydock costs that have not been amortized are expensed at the end of the next drydock.

Impairment of long-lived assets

We follow the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”) which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts.  If indicators of impairment are present, we perform an analysis of the anticipated undiscounted future net cash flows to be derived from the related long-lived assets.

Weaker supply and demand fundamentals experienced in recent years have negatively impacted the drybulk industry. General market volatility has endured as a result of uncertainty about the growth rate of the world economy and the Chinese economy in particular, on which the drybulk industry depends to a significant degree. Additional unforeseen events such as the COVID-19 pandemic and the dam breach that occurred in Brazil at a mine operated by Vale during 2019 have also negatively impacted the market. As a result of these factors and the increased supply of drybulk vessels, freight rates and charter rates have remained volatile in recent years.

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When indicators of impairment are present and our estimate of future undiscounted cash flows for any vessel is lower than the vessel’s carrying value, the carrying value is written down, by recording a charge to operations, to the vessel’s fair market value if the fair market value is lower than the vessel’s carrying value.

We determined that as of December 31, 2020, the future income streams expected to be earned by such vessels over their remaining operating lives and upon disposal on an undiscounted basis would be sufficient to recover their carrying values.  After the impairment of nine of our Supramax vessels as of December 31, 2020 resulting in $67.2 million of impairment during 2020, our estimated future undiscounted cash flows exceeded each of our vessels’ carrying values by a margin of approximately 22% - 115% of the carrying value.  Our vessels remain fully utilized and have a relatively long average remaining useful life of approximately 15 years in which to recover sufficient cash flows on an undiscounted basis to recover their carrying values as of December 31, 2020.  Management will continue to monitor developments in charter rates in the markets in which it participates with respect to the expectation of future rates over an extended period of time that are utilized in the analyses.

In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates, fleet utilization, vessels’ operating expenses, vessels’ capital expenditures and drydocking requirements, vessels’ residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends.  Specifically, we utilize the rates currently in effect for the duration of their current time charters or spot market voyage charters, without assuming additional profit sharing.  For periods of time where our vessels are not fixed on time charters or spot market voyage charters, we utilize an estimated daily time charter equivalent for our vessels’ unfixed days based on the most recent ten year historical one-year time charter average.  In addition, we consider the current market rate environment and, if necessary, adjust our estimates of undiscounted cash flows to reflect the current rate environment. Further, for our older vessels, those vessels in operation for at least 18 years, we evaluate the current rate environment compared to the ten-year historical one-year time charter rate and adjust the rate to better reflect the expected cash flows over the remaining useful lives of those vessels. Older vessels are inherently more susceptible to impairment from weakness in the charter rate environment as their shorter remaining useful lives provide for less of an opportunity for them to benefit from potentially stronger rates in the future. It is reasonably possible that the estimate of undiscounted cash flows may change in the near term due to changes in current rates which adversely affect the average rates being utilized and could result in impairment of certain of our older vessels. Actual equivalent drybulk shipping rates are currently lower than the estimated rates. We believe current rates have been driven by seasonal issues, as well as a number of factors that have affected demand growth and overall sentiment in the drybulk market as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Voyage Revenues.”

Of the inputs that the Company uses for its impairment analysis, future charter rates are the most significant and most volatile.  Based on the sensitivity analysis performed by the Company, the Company would record impairment on its vessels for time charter declines from their most recent ten-year historical one-year time charter averages as follows (this table excludes any vessels held for sale or vessels held for exchange as of December 31, 2020):

		Percentage Decline from Ten-Year	 	
		Historical One-Year Time Charter	 	
		Average at Which Point Impairment	 	
		Would be Recorded	 	
	    	As of	    	As of	 	
		December 31, 		December 31, 	 	
Vessel Class	    	2020	    	2019	 	
Capesize	 	(23.0)	%  	(9.1)	%	
Ultramax (1)	 	(12.3)	%  	(18.8)	%	
Supramax (2)	 	(14.2)	%  	(3.8)	%	
Handysize	 	—	%  	(6.2)	%	

(1)	We excluded the Genco Magic from this sensitivity analysis as the vessel was recently acquired on December 23, 2020.	
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(2)	We excluded the Genco Aquitaine, the Genco Ardennes, the Genco Auvergne, the Genco Bourgogne, the Genco Brittany, the Genco Hunter, the Genco Languedoc, the Genco Pyrenees and the Genco Rhone from this sensitivity analysis as these vessels were impaired during the fourth quarter of 2020.	

For our impairment analysis, we utilize the ten-year historical one-year time charter average, as well as considering the current rate environment, to project future charter rates, which we believe appropriately takes into account the volatility and highs and lows of the shipping cycle. 

Our time charter equivalent (TCE) rates for our fiscal years ended December 31, 2020 and 2019, respectively, were above or (below) the ten-year historical one-year time charter average as of such dates as follows:

		TCE Rates as Compared with Ten-	 	
		Year Historical One-Year Time	 	
		Charter Average	 	
		(as percentage above/(below))	 	
	    	As of	    	As of	 	
		December 31, 		December 31, 	 	
Vessel Class	    	2020	    	2019	 	
Capesize	 	2.1	%  	(19.8)	%	
Panamax	 	—	%  	(9.2)	%	
Ultramax	 	(6.1)	%  	(9.7)	%	
Supramax	 	(19.3)	%  	(18.2)	%	
Handysize	 	—	%  	(6.4)	%	

The projected net operating cash flows are determined by considering the future voyage revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days over the estimated remaining life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard, reduced by brokerage and address commissions, expected outflows for vessels’ maintenance and vessel operating expenses (including planned drydocking and special survey expenditures) and required capital expenditures adjusted annually for inflation, assuming fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $310 per light weight ton, consistent with our vessels’ depreciation policy discussed above.

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for a prolonged period of time, which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings. As of December 31, 2020 and 2019, we did not have any interest rate swap agreements to manage interest costs and the risks associated with changing interest rates.

We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding.  During the years ended December 31, 2020, 2019 and 2018, we were subject to the following interest rates on the outstanding debt under our credit facilities (refer to Note 7 — Debt in our Consolidated Financial Statements for effective dates and termination dates for our credit facilities outlined below):

	●	$133 Million Credit Facility —	

	●	$108 Million Tranche — one-month LIBOR plus 2.50% effective August 17, 2018 when the initial draw down on this facility was made.	
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	●	$25 Million Tranche — one-month LIBOR plus 3.0% effective June 15, 2020 when the initial draw down on this facility was made.	

	●	$495 Million Credit Facility —	

	●	$460 Million Tranche - one-month LIBOR plus 3.25% effective June 5, 2018, when the initial $460 million draw down on this tranche of this facility was made. The applicable margin was reduced to 3.00% from March 5, 2019 to August 9, 2019 pursuant to the terms of the facility.	

	●	$35 Million Tranche – one-month LIBOR plus 2.50% effective August 28, 2019 when the initial draw down on this tranche of this facility was made.	

	●	$400 Million Credit Facility — three-month LIBOR plus 3.75% until June 5, 2018, when this credit facility was refinanced with the $495 Million Credit Facility	

	●	$98 Million Credit Facility — three-month LIBOR plus 6.125% until June 5, 2018, when this credit facility was refinanced with the $495 Million Credit Facility	

	●	2014 Term Loan Facilities — three-month or six-month LIBOR plus 2.50% until June 5, 2018, when this credit facility was refinanced with the $495 Million Credit Facility	

A 1% increase in LIBOR would result in an increase of $5.0 million in interest expense for the year ended December 31, 2020.

From time to time, the Company may consider derivative financial instruments such as swaps and caps or other means to protect itself against interest rate fluctuations.

Derivative financial instruments

As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.  As of December 31, 2020 and 2019, we did not have any derivative financial instruments.

Refer to the “Interest rate risk” section above for further information regarding interest rate swap agreements.

Currency and exchange rate risk

The international shipping industry’s functional currency is the U.S. Dollar. Virtually all of our revenues and most of our operating costs are in U.S. Dollars. We incur certain operating expenses in currencies other than the U.S. Dollar, and the foreign exchange risk associated with these operating expenses is immaterial.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Genco Shipping & Trading Limited
Consolidated Financial Statements
Index to Consolidated Financial Statements

		Page	
			
a)	Report of Independent Registered Public Accounting Firm	F-2	
			
b)	Consolidated Balance Sheets as of December 31, 2020 and 2019	F-5	
			
c)	Consolidated Statements of Operations	F-6	
			
d)	Consolidated Statements of Comprehensive Loss	F-7	
			
e)	Consolidated Statements of Equity	F-8	
			
f)	Consolidated Statements of Cash Flows	F-9	
			
g)	Notes to Consolidated Financial Statements	F-11	

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of
Genco Shipping & Trading Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Genco Shipping & Trading Limited and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter‌
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Vessel Assets – Future Charter Rates – Refer to Note 2 of the consolidated financial statements
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Critical Audit Matter Description
The Company’s evaluation of vessel assets for impairment involves an initial assessment of each vessel asset to determine whether events or changes in circumstances exist that may indicate that the carrying amount of the vessel asset may no longer be recoverable.

If indicators of impairment exist for a vessel asset, the Company determines the recoverable amount by estimating the undiscounted future cash flows associated with the vessel. If the Company’s estimate of undiscounted future cash flows for any vessel asset for which indicators of impairment exist is lower than the vessel asset’s carrying value, and the vessel’s carrying value is greater than its fair market value, the carrying value is written down, by recording a charge to operations, to the vessel asset’s fair market value. The Company makes significant assumptions and judgments to determine the undiscounted future cash flows expected to be generated over the remaining useful life of the asset, including estimates and assumptions related to the future charter rates, fleet utilization, vessel operating expenses, vessel capital expenditures and drydocking requirements, vessel residual value and the estimated remaining useful life of each vessel. Projected future charter rates are the most significant and volatile assumption that the Company uses for its impairment analysis. Total vessel assets as of December 31, 2020, were $919.1 million, net of impairment losses recorded during 2020 of $208.9 million.

We identified future charter rates used in the undiscounted future cash flows analysis as a critical audit matter because of the complex judgments made by management to estimate future charter rates and the significant impact they have on undiscounted cash flows expected to be generated over the remaining useful life of the vessel. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimate of future charter rates.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the future charter rates utilized in the undiscounted future cash flows included the following, among others:

	●	We tested the effectiveness of controls over management’s review of the impairment analysis, including the future charter rates used within the undiscounted future cash flows analysis.	

	●	We evaluated the reasonableness of the Company’s estimate of future charter rates through the performance of the following procedures:	

	o	Evaluated the Company’s methodology for estimating the future charter rates which reflect the rates currently in effect for the duration of their current charters, without assuming additional profit sharing. For periods of time where the vessels are not fixed on time charters or spot market voyage charters, the Company estimates the future daily time charter equivalent for the vessels’ unfixed days based on the most recent ten-year historical one-year time charter average for the vessel class, as well as also considering the current rate environment, to project future charter rates.	

	o	Compared the future charter rates utilized in the undiscounted future cash flow analysis to 1) the Company’s historical rates, 2) historical rate information by vessel class published by third parties and 3) other external market sources, including analysts’ reports and freight forward agreement curves.	

	o	Obtained from the Company’s management the assumptions used in the future charter rates and considered the consistency of the assumptions used with evidence obtained in other areas of the audit. This included 1) internal communications by management to the board of directors and 2) external communications by management to analysts and investors.	
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/s/ Deloitte & Touche LLP		
		
New York, New York		
February 24, 2021
We have served as the Company's auditor since 2005.		

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Genco Shipping & Trading Limited
Consolidated Balance Sheets as of December 31, 2020 and 2019
(U.S. Dollars in thousands, except for share and per share data)

		December 31, 		December 31, 		
	    	2020	    	2019	 	
	    		    		 	
Assets								
Current assets:								
Cash and cash equivalents		$	143,872		$	155,889		
Restricted cash		 	35,492		 	6,045		
Due from charterers, net of a reserve of $669 and $1,064, respectively		 	12,991		 	13,701		
Prepaid expenses and other current assets			10,856			10,049		
Inventories			21,583			27,208		
Vessels held for sale			22,408			10,303		
Total current assets		 	247,202		 	223,195		
								
Noncurrent assets:								
Vessels, net of accumulated depreciation of $204,201 and $288,373, respectively		 	919,114		 	1,273,861		
Vessels held for exchange			38,214			—		
Deferred drydock, net of accumulated amortization of $8,124 and $11,862 respectively		 	14,689		 	17,304		
Fixed assets, net of accumulated depreciation and amortization of $2,266 and $2,154, respectively		 	6,393		 	5,976		
Operating lease right-of-use assets		 	6,882		 	8,241		
Restricted cash		 	315		 	315		
Total noncurrent assets		 	985,607		 	1,305,697		
								
Total assets		$	1,232,809		$	1,528,892		
								
Liabilities and Equity								
Current liabilities:								
Accounts payable and accrued expenses		$	22,793		$	49,604		
Current portion of long-term debt		 	80,642		 	69,747		
Deferred revenue		 	8,421		 	6,627		
Current operating lease liabilities			1,765			1,677		
Total current liabilities:		 	113,621		 	127,655		
								
Noncurrent liabilities:								
Long-term operating lease liabilities			8,061			9,826		
Contract liability		 	7,200		 	—		
Long-term debt, net of deferred financing costs of $9,653 and $13,094, respectively			358,933			412,983		
Total noncurrent liabilities		 	374,194		 	422,809		
								
Total liabilities		 	487,815		 	550,464		
								
Commitments and contingencies (Note 14)								
								
Equity:								
Common stock, par value $0.01; 500,000,000 shares authorized; 41,801,753 and 41,754,413 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively			418			417		
Additional paid-in capital			1,713,406			1,721,268		
Accumulated deficit		 	(968,830)		 	(743,257)		
Total equity		 	744,994		 	978,428		
Total liabilities and equity		$	1,232,809		$	1,528,892		

See accompanying notes to consolidated financial statements.

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Genco Shipping & Trading Limited
Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019 and 2018
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

								
		For the Years Ended December 31,		
	   	2020	   	2019	   	2018		
Revenues:											
Voyage revenues		$	355,560		$	389,496		$	367,522		
											
Total revenues			355,560		 	389,496		 	367,522		
											
Operating expenses:											
Voyage expenses			156,985		 	173,043		 	114,855		
Vessel operating expenses			87,420		 	96,209		 	97,427		
Charter hire expenses			10,307			16,179			1,534		
General and administrative expenses (inclusive of nonvested stock amortization expense of $2,026, $2,057 and $2,231, respectively)			21,266		 	24,516		 	23,141		
Technical management fees			6,961			7,567			8,000		
Depreciation and amortization			65,168		 	72,824		 	68,976		
Impairment of vessel assets			208,935			27,393			56,586		
Loss (gain) on sale of vessels			1,855			168			(3,513)		
											
Total operating expenses			558,897		 	417,899		 	367,006		
											
Operating loss			(203,337)		 	(28,403)		 	516		
											
Other (expense) income:											
Other (expense) income			(851)		 	501		 	367		
Interest income			1,028		 	4,095		 	3,801		
Interest expense			(22,413)		 	(31,955)		 	(33,091)		
Impairment of right-of-use asset			—			(223)			—		
Loss on debt extinguishment			—			—			(4,533)		
											
Other expense			(22,236)		 	(27,582)		 	(33,456)		
											
Net loss		$	(225,573)		$	(55,985)		$	(32,940)		
											
Net loss per share-basic		$	(5.38)		$	(1.34)		$	(0.86)		
Net loss per share-diluted		$	(5.38)		$	(1.34)		$	(0.86)		
Weighted average common shares outstanding-basic			41,907,597		 	41,762,893		 	38,382,599		
Weighted average common shares outstanding-diluted			41,907,597		 	41,762,893		 	38,382,599		
See accompanying notes to consolidated financial statements.

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Genco Shipping & Trading Limited
Consolidated Statements of Comprehensive Loss
For the Years Ended December 31, 2020, 2019 and 2018
(U.S. Dollars in Thousands)

								 	
		For the Years Ended December 31,			
	 	2020	    	2019	  	2018	  	 	
												
Net loss		$	(225,573)	 	$	(55,985)	 	$	(32,940)			
												
Other comprehensive income			—			—		 	—			
												
Comprehensive loss		$	(225,573)	 	$	(55,985)	 	$	(32,940)			

See accompanying notes to consolidated financial statements.

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Genco Shipping & Trading Limited
Consolidated Statements of Equity
(U.S. Dollars in Thousands)

														

												 	
					Additional						 	
		Common		Paid-in		Accumulated			 	
	    	Stock	    	Capital	    	Deficit	     	Total Equity	 	
Balance — January 1, 2018		$	345		$	1,628,355		$	(654,332)		$	974,368		
														
Net loss									(32,940)			(32,940)		
														
Issuance of 7,015,000 shares of common stock			70			109,578						109,648		
														
Issuance of 97,466 shares of vested RSUs			1			(1)						—		
														
Nonvested stock amortization						2,231						2,231		
														
Balance — December 31, 2018		$	416		$	1,740,163		$	(687,272)		$	1,053,307		
														
Net loss									(55,985)			(55,985)		
														
Issuance of 109,943 shares of vested RSUs			1			(1)						—		
														
Cash dividends declared ($0.50 per share)						(20,951)						(20,951)		
														
Nonvested stock amortization						2,057						2,057		
														
Balance — December 31, 2019		$	417		$	1,721,268		$	(743,257)		$	978,428		
														
Net loss									(225,573)		 	(225,573)		
														
Issuance of 47,341 shares of vested RSUs, net of forfeitures of 1,490 shares			1			(1)						—		
														
Cash dividends declared ($0.235 per share)						(9,887)						(9,887)		
														
Nonvested stock amortization						2,026						2,026		
														
Balance — December 31, 2020		$	418		$	1,713,406		$	(968,830)		$	744,994		

See accompanying notes to consolidated financial statements.

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Genco Shipping & Trading Limited
Consolidated Statements of Cash Flows
(U.S. Dollars in Thousands)

		For the Years Ended December 31,			
	 	2020	    	2019		2018	  	 	
Cash flows from operating activities:												
Net loss		$	(225,573)		$	(55,985)		$	(32,940)			
Adjustments to reconcile net loss to net cash provided by operating activities:												
Depreciation and amortization			65,168		 	72,824		 	68,976			
Amortization of deferred financing costs			3,903		 	3,788		 	3,035			
Payment of PIK interest			—			—			(5,341)			
Right-of-use asset amortization			1,359			1,246			—			
Amortization of nonvested stock compensation expense			2,026		 	2,057		 	2,231			
Impairment of right-of-use asset			—			223			—			
Impairment of vessel assets			208,935		 	27,393		 	56,586			
Loss (gain) on sale of vessels			1,855		 	168		 	(3,513)			
Loss on debt extinguishment			—			—			4,533			
Insurance proceeds for protection and indemnity claims			569			494			303			
Insurance proceeds for loss of hire claims			78			—			58			
Change in assets and liabilities:												
Decrease (increase) in due from charterers			710		 	8,605		 	(10,099)			
Increase in prepaid expenses and other current assets			(1,938)		 	(789)		 	(6,626)			
Decrease (increase) in inventories			5,625			2,340			(14,215)			
Decrease in other noncurrent assets			—			—			514			
(Decrease) increase in accounts payable and accrued expenses			(17,355)		 	13,172		 	2,571			
Increase in deferred revenue			1,794		 	223		 	1,190			
Decrease in operating lease liabilities			(1,677)			(1,592)			—			
Increase in deferred rent			—		 	—		 	880			
Deferred drydock costs incurred			(8,583)		 	(14,641)		 	(2,236)			
Net cash provided by operating activities			36,896		 	59,526		 	65,907			
												
Cash flows from investing activities:												
Purchase of vessels and ballast water treatment systems, including deposits			(4,485)		 	(13,960)		 	(241,872)			
Purchase of scrubbers (capitalized in Vessels)			(10,973)			(31,750)			—			
Purchase of other fixed assets			(4,580)		 	(4,714)		 	(1,462)			
Net proceeds from sale of vessels			56,993			26,963			44,330			
Insurance proceeds for hull and machinery claims			484			612			3,629			
Net cash provided by (used in) investing activities			37,439		 	(22,849)		 	(195,375)			
												
Cash flows from financing activities:												
Proceeds from the $133 Million Credit Facility			24,000			—			108,000			
Repayments on the $133 Million Credit Facility			(9,160)			(6,320)			(1,580)			
Proceeds from the $495 Million Credit Facility			11,250			21,500			460,000			
Repayments on the $495 Million Credit Facility			(72,686)			(70,776)			(15,000)			
Repayments on the $400 Million Credit Facility			—			—			(399,600)			
Repayments on the $98 Million Credit Facility			—			—			(93,939)			
Repayments on the 2014 Term Loan Facilities			—		 	—		 	(25,544)			
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		For the Years Ended December 31,			
	 	2020	    	2019		2018	  	 	
Payment of debt extinguishment costs			—			—			(2,962)			
Proceeds from issuance of common stock			—			—			110,249			
Payment of common stock issuance costs			—			(105)			(496)			
Cash dividends paid			(9,847)			(20,877)			—			
Payment of deferred financing costs			(462)		 	(611)		 	(11,845)			
Net cash (used in) provided by financing activities			(56,905)		 	(77,189)		 	127,283			
												
Net increase (decrease) in cash, cash equivalents and restricted cash			17,430		 	(40,512)		 	(2,185)			
												
Cash, cash equivalents and restricted cash at beginning of period			162,249		 	202,761		 	204,946			
Cash, cash equivalents and restricted cash at end of period		$	179,679		$	162,249		$	202,761			

See accompanying notes to consolidated financial statements.

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Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except per Share Data)
Notes to Consolidated Financial Statements for the Years Ended December 31, 2020, 2019 and 2018

1 - GENERAL INFORMATION

The accompanying consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”) and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of December 31, 2020, is the direct or indirect owner of all of the outstanding shares or limited liability company interests of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; Genco Shipping Pte. Ltd.; Genco Shipping A/S; Baltic Trading Limited (“Baltic Trading”); and the ship-owning subsidiaries as set forth below under “Other General Information.”

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus strain, or COVID-19, to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Governments have implemented measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, working from home, supply chain logistical changes, and closure of non-essential businesses. This has led to a significant slowdown in overall economic activity levels globally and a decline in demand for certain of the raw materials that our vessels transport.

At present, it is not possible to ascertain any future impact of COVID-19 on the Company’s operational and financial performance, which may take some time to materialize and may not be fully reflected in the results for 2020.  However, an increase in the severity or duration or a resurgence of the COVID-19 pandemic and the timing of wide-scale vaccine distribution could have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition, the carrying value of the Company’s assets, the fair values of the Company’s vessels, and the Company’s ability to pay dividends. 

On June 19, 2018, the Company closed an equity offering of 7,015,000 shares of common stock at an offering price of $16.50 per share.  The Company received net proceeds of $109,648 after deducting underwriters’ discounts and commissions and other expenses.

Other General Information

As of December 31, 2020, 2019 and 2018, the Company’s fleet consisted of 47, 55 and 59 vessels, respectively.

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Below is the list of Company’s wholly owned ship-owning subsidiaries as of December 31, 2020:

Wholly Owned Subsidiaries	    	Vessel Acquired	    	Dwt	    	Delivery Date	    	Year Built	 	
										
Genco Augustus Limited	 	Genco Augustus	 	180,151	 	8/17/07	 	2007		
Genco Tiberius Limited	 	Genco Tiberius	 	175,874	 	8/28/07	 	2007		
Genco London Limited	 	Genco London	 	177,833	 	9/28/07	 	2007		
Genco Titus Limited	 	Genco Titus	 	177,729	 	11/15/07	 	2007		
Genco Warrior Limited	 	Genco Warrior	 	55,435	 	12/17/07	 	2005		
Genco Predator Limited	 	Genco Predator	 	55,407	 	12/20/07	 	2005		
Genco Hunter Limited	 	Genco Hunter	 	58,729	 	12/20/07	 	2007		
Genco Constantine Limited	 	Genco Constantine	 	180,183	 	2/21/08	 	2008		
Genco Hadrian Limited	 	Genco Hadrian	 	169,025	 	12/29/08	 	2008		
Genco Commodus Limited	 	Genco Commodus	 	169,098	 	7/22/09	 	2009		
Genco Maximus Limited	 	Genco Maximus	 	169,025	 	9/18/09	 	2009		
Genco Claudius Limited	 	Genco Claudius	 	169,001	 	12/30/09	 	2010		
Genco Avra Limited	 	Genco Avra	 	34,391	 	5/12/11	 	2011		
Genco Mare Limited	 	Genco Mare	 	34,428	 	7/20/11	 	2011		
Genco Spirit Limited	 	Genco Spirit	 	34,432	 	11/10/11	 	2011		
Genco Aquitaine Limited	 	Genco Aquitaine	 	57,981	 	8/18/10	 	2009		
Genco Ardennes Limited	 	Genco Ardennes	 	58,018	 	8/31/10	 	2009		
Genco Auvergne Limited	 	Genco Auvergne	 	58,020	 	8/16/10	 	2009		
Genco Bourgogne Limited	 	Genco Bourgogne	 	58,018	 	8/24/10	 	2010		
Genco Brittany Limited	 	Genco Brittany	 	58,018	 	9/23/10	 	2010		
Genco Languedoc Limited	 	Genco Languedoc	 	58,018	 	9/29/10	 	2010		
Genco Lorraine Limited	 	Genco Lorraine	 	53,417	 	7/29/10	 	2009		
Genco Picardy Limited	 	Genco Picardy	 	55,257	 	8/16/10	 	2005		
Genco Provence Limited	 	Genco Provence	 	55,317	 	8/23/10	 	2004		
Genco Pyrenees Limited	 	Genco Pyrenees	 	58,018	 	8/10/10	 	2010		
Genco Rhone Limited	 	Genco Rhone	 	58,018	 	3/29/11	 	2011		
Genco Weatherly Limited		Genco Weatherly		61,556		7/26/18		2014		
Genco Columbia Limited		Genco Columbia		60,294		9/10/18		2016		
Genco Endeavour Limited		Genco Endeavour		181,060		8/15/18		2015		
Genco Resolute Limited		Genco Resolute		181,060		8/14/18		2015		
Genco Defender Limited		Genco Defender		180,021		9/6/18		2016		
Genco Liberty Limited		Genco Liberty		180,032		9/11/18		2016		
Genco Magic Limited		Genco Magic		63,446		12/23/20		2014		
Baltic Lion Limited		Baltic Lion		179,185		4/8/15	(1)	2012		
Baltic Tiger Limited		Genco Tiger		179,185		4/8/15	(1)	2011		
Baltic Leopard Limited	 	Baltic Leopard	 	53,446	 	4/8/10		2009		
Baltic Panther Limited		Baltic Panther		53,350		4/29/10		2009		
Baltic Cougar Limited	 	Baltic Cougar	 	53,432	 	5/28/10		2009		
Baltic Bear Limited	 	Baltic Bear	 	177,717	 	5/14/10		2010		
Baltic Wolf Limited	 	Baltic Wolf	 	177,752	 	10/14/10		2010		
Baltic Cove Limited	 	Baltic Cove	 	34,403	 	8/23/10		2010		
Baltic Fox Limited	 	Baltic Fox	 	31,883	 	9/6/13		2010		
Baltic Hare Limited	 	Baltic Hare	 	31,887	 	9/5/13		2009		
Baltic Hornet Limited	 	Baltic Hornet	 	63,574	 	10/29/14		2014		
Baltic Wasp Limited	 	Baltic Wasp	 	63,389	 	1/2/15		2015		
Baltic Scorpion Limited	 	Baltic Scorpion	 	63,462	 	8/6/15		2015		
Baltic Mantis Limited	 	Baltic Mantis	 	63,470	 	10/9/15		2015		

(1)	The delivery date for these vessels represents the date that the vessel was purchased from Baltic Trading.	

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of GS&T and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

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Business geographics

The Company’s vessels regularly move between countries in international waters, over hundreds of trade routes and, as a result, the disclosure of geographic information is impracticable.

Vessel acquisitions

When the Company enters into an acquisition transaction, it determines whether the acquisition transaction was the purchase of an asset or a business based on the facts and circumstances of the transaction. As is customary in the shipping industry, the purchase of a vessel is normally treated as a purchase of an asset as the historical operating data for the vessel is not reviewed nor is it material to the Company’s decision to make such acquisition.

When a vessel is acquired with an existing time charter, the Company allocates the purchase price to the vessel and the time charter based on, among other things, vessel market valuations and the present value (using an interest rate which reflects the risks associated with the acquired charters) of the difference between (i) the contractual amounts to be paid pursuant to the charter terms and (ii) management’s estimate of the fair market charter rate, measured over a period equal to the remaining term of the charter. The capitalized above-market (assets) and below-market (liabilities) charters are amortized as a reduction or increase, respectively, to voyage revenues over the remaining term of the charter.

Segment reporting

The Company reports financial information and evaluates its operations by voyage revenues and not by the length of ship employment for its customers, i.e., spot or time charters. Each of the Company’s vessels serve the same type of customer, have similar operation and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment, the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels.‌

Revenue recognition

Since the Company’s inception, revenues have been generated from time charter agreements, spot market voyage charters, pool agreements and spot market-related time charters. Voyage revenues also include the sale of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.

Time charters

A time charter involves placing a vessel at the charterer’s disposal for a set period of time during which the charterer may use the vessel in return for the payment by the charterer of a specified daily hire rate, including any ballast bonus payments received pursuant to the time charter agreement. Spot market-related time charters are the same as other time charter agreements, except the time charter rates are variable and are based on a percentage of the average daily rates as published by the Baltic Dry Index (“BDI”).

The Company records time charter revenues, including spot market-related time charters, over the term of the charter as service is provided. Revenues are recognized on a straight-line basis as the average revenue over the term of the respective time charter agreement for which the performance obligations are satisfied beginning when the vessel is delivered to the charterer until it is redelivered back to the Company. The Company records spot market-related time charter revenues over the term of the charter as service is provided based on the rate determined based on the BDI for each respective billing period. As such, the revenue earned by the Company’s vessels that are on spot market-related time charters is subject to fluctuations of the spot market. Time charter contracts, including spot market-related time charters, are considered operating leases and therefore do not fall under the scope of ASC 606 (as defined under “Recent accounting pronouncements” below) because (i) the vessel is an identifiable asset; (ii) the Company does not have substantive substitution rights; and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives economic benefit from such use.

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The Company has identified that time charter agreements, including fixed rate time charters and spot market-related time charters, contain a lease in accordance with ASC 842 (as defined under “Recent accounting pronouncements” below). Refer to Note 12 — Voyage Revenues for further discussion.
 
Spot market voyage charters

In a spot market voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or "dead" freight. The contract generally has a "demurrage" or "despatch" clause. As per this clause, the charterer reimburses the Company for any potential delays exceeding the allowed laytime as per the charter party clause at the ports visited which is recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime known as despatch resulting in a reduction in revenue. The voyage contracts generally have variable consideration in the form of demurrage or despatch. The amount of revenue earned as demurrage or despatch paid by the Company for the years ended December 31, 2020, 2019 and 2018 is not material.

Revenue for spot market voyage charters is recognized ratably over the total transit time of each voyage, which commences at the time the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port.

Voyage expense recognition

In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters, spot market-related time charters and pool agreements. Refer to Note 12 — Voyage Revenues for further discussion of the accounting for fuel expenses for spot market voyage charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, the Company records lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. These differences in bunkers, including any lower of cost and net realizable value adjustments, resulted in a net (loss) gain of ($697), ($829) and $3,000 during the years ended December 31, 2020, 2019 and 2018, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.‌

Loss on debt extinguishment
 
During the year ended December 31, 2018, the Company recorded $4,533 related to the loss on the extinguishment of debt in accordance with Accounting Standards Codification (“ASC”) 470-50 — “Debt – Modifications and Extinguishments” (“ASC 470-50”). This loss was recognized as a result of the refinancing of the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities with the $495 Million Credit Facility on June 5, 2018 as described in Note 7 — Debt.

Due from charterers, net

Due from charterers, net includes accounts receivable from charters, including receivables for spot market voyages, net of the provision for doubtful accounts. At each balance sheet date, the Company records the provision based on a review of all outstanding charter receivables. Included in the standard time charter contracts with the Company’s customers are certain performance parameters which, if not met, can result in customer claims. As of December 31, 2020 and 2019, the Company had a reserve of $669 and $1,064, respectively, against the due from charterers balance and an additional accrual of $358 and $577, respectively, in deferred revenue, each of which is
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primarily associated with estimated customer claims against the Company including vessel performance issues under time charter agreements.

Revenue is based on contracted charterparties. However, there is always the possibility of dispute over terms and payment of hires and freights. In particular, disagreements may arise concerning the responsibility of lost time and revenue. Accordingly, the Company periodically assesses the recoverability of amounts outstanding and estimates a provision if there is a possibility of non-recoverability. The Company believes its provisions to be reasonable based on information available.

Inventories

Inventories consist of consumable bunkers and lubricants that are stated at the lower of cost and net realizable value. Cost is determined by the first in, first out method.‌
 
Vessel operating expenses

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses. Vessel operating expenses are recognized when incurred.

Charter hire expenses
 
During the second quarter of 2018, the Company began chartering-in third party vessels.  The costs to charter-in these vessels, which primarily include the daily charter hire rate net of commissions or net freight revenue, are recorded as Charter hire expenses. The Company recorded $10,307, $16,179 and $1,534 of charter hire expenses during the years ended December 31, 2020, 2019 and 2018, respectively.

Vessels, net

Vessels, net is stated at cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost that is directly attributable to the acquisition of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date of initial delivery from the shipyard. Depreciation expense for vessels for the years ended December 31, 2020, 2019 and 2018 was $58,008, $66,351 and $64,012, respectively.

Depreciation expense is calculated based on cost less the estimated residual scrap value. The costs of significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the vessel’s remaining estimated useful life or the estimated life of the renewal or betterment. Undepreciated cost of any asset component being replaced that was acquired after the initial vessel purchase is written off as a component of vessel operating expense. Expenditures for routine maintenance and repairs are expensed as incurred. Scrap value is estimated by the Company by taking the estimated scrap value of $310 per lightweight ton (“lwt”) times the weight of the vessel noted in lwt.

Vessels held for sale

The Company’s Board of Directors has approved a strategy of divesting specifically identified older, less fuel-efficient vessels as part of a fleet renewal program to streamline and modernize the Company’s fleet.

On November 3, 2020, November 27, 2020 and November 30, 2020, the Company entered into agreements to sell the Baltic Panther, the Baltic Hare and the Baltic Cougar, respectively. The relevant vessel assets have been classified as held for sale in the Consolidated Balance Sheet as of December 31, 2020. The Baltic Panther, the Baltic Hare and the Baltic Cougar were sold on January 4, 2021, January 15, 2021 and February 24, 2021, respectively. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreements.
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On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder, and the relevant vessel assets have been classified as held for sale in the Consolidated Balance Sheet as of December 31, 2019. The vessel was sold on March 5, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement.

Vessels held for exchange

The vessel assets for the remaining five vessels to be exchanged as part of an agreement entered into by the Company on December 17, 2020 have been classified as vessels held for exchange in the Consolidated Balance Sheet as of December 31, 2020 in the amount of $38,214, after recognition of impairment. This includes the vessel assets for the Baltic Cove, the Baltic Fox, the Genco Avra, the Genco Mare and the Genco Spirit. These vessels were exchanged during the first quarter of 2021. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement and Note 19 — Subsequent Events.

Contract liability

The Company has recorded a contract liability of $7,200 as of December 31, 2020 which is related to the timing of the exchange of vessels pursuant to the agreement entered into by the Company on December 17, 2020 to exchange six of the Company’s Handysize vessels for three Ultramax vessels owned by the counterparty. As of December 31, 2020, the Company completed the exchange of one of its Handysize vessels, the Genco Ocean, for one Ultramax vessel, the Genco Magic. The $7,200 contract liability represents the excess of fair value of the vessels received as of December 31, 2020 over the fair value of the vessel contributed to the counterparty. The exchange of the remainder of the vessels under the agreement were completed during the first quarter of 2021. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement and Note 19 — Subsequent Events.

Fixed assets, net

Fixed assets, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are based on a straight line basis over the estimated useful life of the specific asset placed in service. The following table is used in determining the typical estimated useful lives:

Description	    	Useful lives	
						
Leasehold improvements	 	Lesser of the estimated useful life of the asset or life of the lease	
Furniture, fixtures & other equipment	 	5 years	
Vessel equipment	 	2-15 years	
Computer equipment	 	3 years	

Depreciation and amortization expense for fixed assets for the years ended December 31, 2020, 2019 and 2018 was $1,562, $989 and $335, respectively.

Deferred drydocking costs

The Company’s vessels are required to be drydocked approximately every 30 to 60 months for major repairs and maintenance that cannot be performed while the vessels are operating. The Company defers the costs associated with the drydockings as they occur and amortizes these costs on a straight-line basis over the period between drydockings. Costs deferred as part of a vessel’s drydocking include actual costs incurred at the drydocking yard; cost of travel, lodging and subsistence of personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee the drydocking. If the vessel is drydocked earlier than originally anticipated, any remaining deferred drydock costs that have not been amortized are expensed at the end of the next drydock.

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Amortization expense for drydocking for the years ended December 31, 2020, 2019 and 2018 was $5,598, $5,484 and $4,629, respectively, and is included in Depreciation and amortization expense in the Consolidated Statements of Operations. All other costs incurred during drydocking are expensed as incurred.

Impairment of long-lived assets

During the years ended December 31, 2020, 2019 and 2018, the Company recorded $208,935, $27,393 and $56,586, respectively, related to the impairment of vessel assets in accordance with ASC 360 — “Property, Plant and Equipment” (“ASC 360”). ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows to be derived from the related long-lived assets.

When the Company performs its analysis of the anticipated undiscounted future net cash flows, the Company utilizes various assumptions based on historical trends. Specifically, the Company utilizes the rates currently in effect for the duration of their current time charters or spot market voyage charters, without assuming additional profit sharing.  For periods of time during which the Company’s vessels are not fixed on time charters or spot market voyage charters, the Company utilizes an estimated daily time charter equivalent for the vessels’ unfixed days based on the most recent ten year historical one-year time charter average.  In addition, the Company considers the current market rate environment and, if necessary, will adjust its estimates of future undiscounted cash flows to reflect the current rate environment. The projected undiscounted future net cash flows are determined by considering the future voyage revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days over the estimated remaining life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard, reduced by brokerage and address commissions, expected outflows for vessels’ maintenance and vessel operating expenses (including planned drydocking and special survey expenditures) and required capital expenditures adjusted annually for inflation, assuming fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $310 per light weight ton, consistent with the Company’s depreciation policy.

On January 22, 2021, the Company entered into an agreement to sell the Genco Lorraine, a 2009-built Supramax vessel, to a third party for $7,950 less a 2.5% commission payable to a third party. Additionally, on January 25, 2021, the Company entered into an agreement to sell the Baltic Leopard, a 2009-built Supramax vessel, to a third party for $8,000 less a 2.0% commission payable to a third party. As the undiscounted cash flows, including the net sales price, did not exceed the net book value of the Genco Lorraine and Baltic Leopard as of December 31, 2020, the vessels values for the Genco Lorraine and Baltic Leopard were adjusted to their net sales prices of $7,751 and $7,840 as of December 31, 2020, respectively. This resulted in an impairment loss of $404 and $399 for the Genco Lorraine and Baltic Leopard, respectively, during the year ended December 31, 2020.

As of December 31, 2020, the Company determined that the expected estimated future undiscounted cash flows for nine of its Supramax vessels, the Genco Aquitaine, the Genco Ardennes, the Genco Auvergne, the Genco Bourgogne, the Genco Brittany, the Genco Hunter, the Genco Languedoc, the Genco Pyrenees and the Genco Rhone, did not exceed the net book value of these vessels. The Company adjusted the carrying value of these vessels to their respective fair market values as of December 31, 2020 which resulted in an impairment loss of $67,200 during the year ended December 31, 2020.

On December 17, 2020, the Company entered into an agreement to acquire three Ultramax vessels in exchange for six of our Handysize vessels. The six Handysize vessels include the Genco Ocean, the Baltic Cove and the Baltic Fox, all 2010-built Handysize vessels, and the Genco Avra, the Genco Mare and the Genco Spirit, all 2011-built Handysize vessels. The values for these six Handysize vessels were adjusted to their total fair market value of $46,000 as of the date of the agreement less a 1.0% commission payable to a third party which resulted in an impairment loss of $4,647 during the year ended December 31, 2020.

On November 30, 2020, the Company entered into an agreement to sell the Genco Cougar, a 2009-built Supramax vessel, to a third party for $7,600 less a 3.0% commission payable to a third party. Therefore, the vessel value
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for the Baltic Cougar was adjusted to its net sales price of $7,372 as of December 31, 2020. This resulted in an impairment loss of $790 during the year ended December 31, 2020.

On November 27, 2020, the Company entered into an agreement to sell the Baltic Hare, a 2009-built Handysize vessel, to a third party for $7,750 less a 2.0% commission payable to a third party. Therefore, the vessel value for the Baltic Hare was adjusted to its net sales price of $7,595 as of December 31, 2020. This resulted in an impairment loss of $769 during the year ended December 31, 2020.

On November 3, 2020, the Company entered into an agreement to sell the Baltic Panther, a 2009-built Supramax vessel, to a third party for $7,510 less a 3.0% commission payable to a third party. As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of September 30, 2020, the vessel value for the Baltic Panther was adjusted to its net sales price of $7,285 as of September 30, 2020. This resulted in an impairment loss of $3,713 during the year ended December 31, 2020.

On October 16, 2020, the Company entered into an agreement to sell the Genco Loire, a 2009-built Supramax vessel, to a third party for $7,650 less a 2.0% commission payable to a third party. As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of September 30, 2020, the vessel value for the Genco Loire was adjusted to its net sales price of $7,497 as of September 30, 2020. This resulted in an impairment loss of $3,408 during the year ended December 31, 2020.

On September 30, 2020, the Company determined that the expected estimated future undiscounted cash flows for three of its Supramax vessels, the Genco Lorraine, the Baltic Cougar and the Baltic Leopard, did not exceed the net book value of these vessels as of September 30, 2020. The Company adjusted the carrying value of these vessels to their respective fair market values as of September 30, 2020. This resulted in an impairment loss of $7,963 during the year ended December 31, 2020.

On September 25, 2020, the Company entered into an agreement to sell the Baltic Jaguar, a 2009-built Supramax vessel, to a third party for $7,300 less a 3.0% commission payable to a third party. Therefore, the vessel value for the Baltic Jaguar was adjusted to its net sales price of $7,081 as of September 30, 2020. This resulted in an impairment loss of $4,140 during the year ended December 31, 2020.

On September 17, 2020, the Company entered in an agreement to sell the Genco Normandy, a 2007-built Supramax vessel, to a third party for $5,850 less a 2.0% commission payable to a third party. Therefore, the vessel value for the Genco Normandy was adjusted to its net sales price of $5,733 as of September 30, 2020. This resulted in an impairment loss of $2,679 during the year ended December 31, 2020.

At March 31, 2020, the Company determined that the expected estimated future undiscounted cash flows for four of its Supramax vessels, the Genco Picardy, the Genco Predator, the Genco Provence and the Genco Warrior, did not exceed the net book value of these vessels as of March 31, 2020. The Company adjusted the carrying value of these vessels to their respective fair market values as of March 31, 2020. This resulted in an impairment loss of $27,055 during the year ended December 31, 2020.

On February 24, 2020, the Board of Directors determined to dispose of the Company’s following ten Handysize vessels: the Baltic Hare, the Baltic Fox, the Baltic Wind, the Baltic Cove, the Baltic Breeze, the Genco Ocean, the Genco Bay, the Genco Avra, the Genco Mare and the Genco Spirit, at times and on terms to be determined in the future.  Given this decision, and that the revised estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel given the estimated probabilities of whether the vessels will be sold, the Company adjusted the values of these older vessels to their respective fair market values during the three months ended March 31, 2020. Subsequent to February 24, 2020, the Company has entered into agreements to sell three of these vessels during the three months ended March 31, 2020, namely the Baltic Wind, the Baltic Breeze and the Genco Bay, which were adjusted to their net sales price. This resulted in an impairment loss of $85,768 during the year ended December 31, 2020.

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On February 3, 2020, the Company entered into an agreement to sell the Genco Charger, a 2005-built Handysize vessel, to a third party for $5,150 less a 1.0% commission payable to a third party.   As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of December 31, 2019, the vessel value for the Genco Charger was adjusted to its net sales price of $5,099 as of December 31, 2019. This resulted in an impairment loss of $1,314 during the year ended December 31, 2019.

On November 4, 2019, the Company entered into an agreement to sell the Genco Raptor, a 2007-built Panamax vessel, to a third party for $10,200 less a 2.0% commission payable to a third party.  As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of September 30, 2019, the vessel value for the Genco Raptor was adjusted to its net sales price of $9,996 as of September 30, 2019. This resulted in an impairment loss of $5,812 during the year ended December 31, 2019.

On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder, a 2007-built Panamax vessel, for $10,400 less a 2.0% broker commission payable to a third party.  Therefore, the vessel value for the Genco Thunder was adjusted to its net sales price of $10,192 as of September 30, 2019.  This resulted in an impairment loss of $5,749 during the year ended December 31, 2019. 

 On September 20, 2019, the Company entered into an agreement to sell the Genco Champion, a 2006-built Handysize vessel, for $6,600 less a 3.0% broker commission payable to a third party.  Therefore, the vessel value for the Genco Champion was adjusted to its net sales price of $6,402 as of September 30, 2019.  This resulted in an impairment loss of $621 during the year ended December 31, 2019. 

On August 2, 2019, the Company entered into an agreement to sell the Genco Challenger, a 2003-built Handysize vessel, for $5,250 less a 2.0% broker commission payable to a third party.  As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of June 30, 2019, the vessel value for the Genco Challenger was adjusted to its net sales price of $5,145 as of June 30, 2019.  This resulted in an impairment loss of $4,401 during the year ended December 31, 2019.  
 
At June 30, 2019, the Company determined that the expected estimated future undiscounted cash flows for the Genco Champion, a 2006-built Handysize vessel, and the Genco Charger, a 2005-built Handysize vessel, did not exceed the net book value of these vessels as of June 30, 2019.  As such, the Company adjusted the value of these vessels to their respective fair market values as of June 30, 2019.  This resulted in an impairment loss of $9,496 during the year ended December 31, 2019. 

On July 24, 2018, the Company entered into an agreement to sell the Genco Surprise, a 1998-built Panamax vessel, for $5,300 less a 3.0% broker commission payable to a third party.  As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of June 30, 2018, the vessel value for the Genco Surprise was adjusted to its net sales price of $5,141 as of June 30, 2018.  This resulted in an impairment loss of $184 during the year ended December 31, 2018.  

On February 27, 2018, the Board of Directors determined to dispose of the Company’s following nine vessels: the Genco Cavalier, the Genco Loire, the Genco Lorraine, the Genco Muse, the Genco Normandy, the Baltic Cougar, the Baltic Jaguar, the Baltic Leopard and the Baltic Panther, at times and on terms to be determined in the future.  Given this decision, and that the estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel, we adjusted the values of these older vessels to their respective fair market values during the year ended December 31, 2018.  This resulted in an impairment loss of $56,402 during the year ended December 31, 2018.

Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the sale of the aforementioned vessels. 

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Loss (gain) on sale of vessels

During the years ended December 31, 2020, 2019 and 2018, the Company recorded net (losses) gains of ($1,855), ($168) and $3,513, respectively, related to the sale of vessels. The ($1,855) net loss recognized during the year ended December 31, 2020 related primarily to the sale of the Genco Charger, the Genco Thunder, the Baltic Wind, the Baltic Breeze, the Genco Bay, the Baltic Jaguar, the Genco Loire, the Genco Normandy and the Genco Ocean. The ($168) net loss recognized during the year ended December 31, 2019 related primarily to the sale of the Genco Challenger, the Genco Champion and the Genco Raptor which was largely offset by a net gain related to the sale of the Genco Vigour. The $3,513 net gain recognized during the year ended December 31, 2018 related primarily to the sale of the Genco Progress, the Genco Cavalier, the Genco Explorer, the Genco Muse, the Genco Beauty and the Genco Knight. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the sale of these vessels.

Deferred financing costs

Deferred financing costs, which are presented as a direct deduction within the outstanding debt balance in the Company’s Consolidated Balance Sheets, consist of fees, commissions and legal expenses associated with securing loan facilities and other debt offerings and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in Interest expense in the Consolidated Statements of Operations.

Cash and cash equivalents

The Company considers highly liquid investments, such as money market funds and certificates of deposit with an original maturity of three months or less to be cash equivalents.

Restricted Cash

Current and non-current restricted cash includes cash that is restricted pursuant to our credit facilities, refer to Note 7 — Debt. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows:

		December 31, 		December 31, 		
	    	2020	    	2019	 	
Cash and cash equivalents	 	$	143,872	 	$	155,889		
Restricted cash - current			35,492			6,045		
Restricted cash - noncurrent		 	315		 	315		
								
Cash, cash equivalents and restricted cash	 	$	179,679	 	$	162,249		

United States Gross Transportation Tax

Pursuant to Section 883 of the U.S. Internal Revenue Code of 1986 (as amended) (the “Code”), qualified income derived from the international operations of ships is excluded from gross income and exempt from U.S. federal income tax if a company engaged in the international operation of ships meets certain requirements (the “Section 883 exemption”). Among other things, in order to qualify, the Company must be incorporated in a country that grants an equivalent exemption to U.S. corporations and must satisfy certain qualified ownership requirements.

The Company is incorporated in the Marshall Islands. Pursuant to the income tax laws of the Marshall Islands, the Company is not subject to Marshall Islands income tax. The Marshall Islands has been officially recognized by the Internal Revenue Service as a qualified foreign country that currently grants the requisite equivalent exemption from tax. The Company is not taxable in any other jurisdiction, with the exception of Genco Management (USA) Limited, Genco Shipping Pte. Ltd. and Genco Shipping A/S, as noted in the “Income taxes” section below.
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The Company will qualify for the Section 883 exemption if, among other things, (i) the Company’s stock is treated as primarily and regularly traded on an established securities market in the United States (the “publicly traded test”) or (ii) the Company satisfies the qualified shareholder test or (iii) the Company satisfies the controlled foreign corporation test (the “CFC test”). Under applicable Treasury Regulations, the publicly traded test cannot be satisfied in any taxable year in which persons who actually or constructively own 5% or more of the Company’s stock (which the Company sometimes refers to as “5% shareholders”), together own 50% or more of the Company’s stock (by vote and value) for more than half the days in such year (which the Company sometimes refers to as the “five percent override rule”), unless an exception applies. A foreign corporation satisfies the qualified shareholder test if more than 50 percent of the value of its outstanding shares is owned (or treated as owned by applying certain attribution rules) for at least half of the number of days in the foreign corporation's taxable year by one or more “qualified shareholders.” A qualified shareholder includes a foreign corporation that, among other things, satisfies the publicly traded test. A foreign corporation satisfies the CFC test if it is a “controlled foreign corporation” and one or more qualified U.S. persons own more than 50 percent of the total value of all the outstanding stock.

Based on the publicly traded requirement of the Section 883 regulations, the Company believes that it qualified for exemption from income tax on income derived from the international operations of vessels during the years ended December 31, 2020, 2019 and 2018. In order to meet the publicly traded requirement, the Company’s stock must be treated as being primarily and regularly traded for more than half the days of any such year. Under the Section 883 regulations, the Company’s qualification for the publicly traded requirement may be jeopardized if 5% shareholders own, in the aggregate, 50% or more of the Company’s common stock for more than half the days of the year. Management believes that during the years ended December 31, 2020, 2019 and 2018, the combined ownership of its 5% shareholders did not equal 50% or more of its common stock for more than half the days of each of those years.

If the Company does not qualify for the Section 883 exemption, the Company’s U.S. source shipping income, i.e., 50% of its gross shipping income attributable to transportation beginning or ending in the U.S. (but not both beginning and ending in the U.S.) is subject to a 4% tax without allowance for deductions (the “U.S. gross transportation tax”).

During the years ended December 31, 2020, 2019 and 2018, the Company qualified for Section 883 exemption and, therefore, did not record any U.S. gross transportation tax.

Income taxes

To the extent the Company’s U.S. source shipping income, or other U.S. source income, is considered to be effectively connected income, as described below, any such income, net of applicable deductions, would be subject to the U.S. federal corporate income tax, imposed at a 21% rate effective 2018. In addition, the Company may be subject to a 30% "branch profits" tax on such income, and on certain interest paid or deemed paid attributable to the conduct of such trade or business. Shipping income is generally sourced 100% to the United States if attributable to transportation exclusively between United States ports (the Company is prohibited from conducting such voyages), 50% to the United States if attributable to transportation that begins or ends, but does not both begin and end, in the United States (as described in “United States Gross Transportation Tax” above) and otherwise 0% to the United States.

The Company’s U.S. source shipping income would be considered effectively connected income only if:

	●	the Company has, or is considered to have, a fixed place of business in the U.S. involved in the earning of U.S. source shipping income; and	

	●	substantially all of the Company’s U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the U.S.	

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The Company does not intend to have, or permit circumstances that would result in having, any vessel sailing to or from the U.S. on a regularly scheduled basis. Based on the current shipping operations of the Company and the Company’s expected future shipping operations and other activities, the Company believes that none of its U.S. source shipping income will constitute effectively connected income. However, the Company may from time to time generate non-shipping income that may be treated as effectively connected income.

The Company established Genco Shipping Pte. Ltd. (“GSPL”), which is based in Singapore, on September 8, 2017. GSPL applied for and was awarded the Maritime Sector Incentive – Approved International Shipping Enterprise (“MSI-AIS”) status under Section 13F of the Singapore Income Tax Act (“SITA”) by the Maritime and Port Authority of Singapore. The award is for an initial period of 10 years, commencing on August 15, 2018, and is subject to a review of performance at the end of the initial five year period.  The MSI-ASI status provides for a tax exemption on income derived by GSPL from qualifying shipping operations under Section 13F of the SITA. Income from non-qualifying activities is taxable at the prevailing Singapore Corporate income tax rate (currently 17%). During the years ended December 31, 2020, 2019 and 2018, there was no income tax recorded by GSPL.

During 2018, the Company established Genco Shipping A/S, which is a Danish-incorporated corporation which is based in Copenhagen and considered to be a resident for tax purposes in Denmark. Genco Shipping A/S was subject to corporate taxes in Denmark a rate of 22% during 2018, 2019 and 2020. During the years ended December 31, 2020, 2019 and 2018, Genco Shipping A/S recorded $407, $241 and $79, respectively, of income tax in Other income (expense) in the Consolidated Statements of Operations.

Deferred revenue

Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as income when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. Refer to “Revenue recognition” above for description of the Company’s revenue recognition policy.

Nonvested stock awards

The Company follows ASC Subtopic 718-10, “Compensation — Stock Compensation” (“ASC 718-10”), for nonvested stock issued under its equity incentive plans. Stock-based compensation costs from nonvested stock have been classified as a component of additional paid-in capital in the Consolidated Statements of Equity.

Accounting estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, the valuation of amounts due from charterers, performance claims, residual value of vessels, useful life of vessels and the fair value of derivative instruments, if any. Actual results could differ from those estimates.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are amounts due from charterers and cash and cash equivalents. With respect to amounts due from charterers, the Company attempts to limit its credit risk by performing ongoing credit evaluations and, when deemed necessary, requires letters of credit, guarantees or collateral. The Company earned all of its voyage revenues from 166, 170 and 182 customers during the years ended December 31, 2020, 2019 and 2018.

For the years ended December 31, 2020, 2019 and 2018, there were no customers that individually accounted for more than 10% of voyage revenues.

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As of December 31, 2020 and 2019, the Company maintains all of its cash and cash equivalents with five and four financial institutions, respectively. None of the Company’s cash and cash equivalents balance is covered by insurance in the event of default by these financial institutions.

Fair value of financial instruments

The estimated fair values of the Company’s financial instruments, such as amounts due to / due from charterers, accounts payable and long-term debt, approximate their individual carrying amounts as of December 31, 2020 and 2019 due to their short-term maturity or the variable-rate nature of the respective borrowings under the credit facilities. See Note 8 — Fair Value of Financial Instruments for additional disclosure on the fair value of long-term debt.

Recent accounting pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”).” ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for adoption at any time between March 12, 2020 and December 31, 2022. The Company is currently evaluating the impact of this adoption on its consolidated financial statements and related disclosures. 

In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”),” which changes the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and for interim periods within that year.  Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU.  The Company has evaluated the impact of the adoption of ASU 2018-03 and has determined that there is no effect on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13"). ASU 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 was effective on January 1, 2020, with early adoption permitted.  The Company adopted ASU 2016-13 during the first quarter of 2020 and it did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASC 842”), which replaced the existing guidance in ASC 840 – Leases (“ASC 840”).  This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases.  Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability for leases with lease terms of more than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset and for operating leases, the lessee would recognize a straight-line total lease expense.  Accounting by lessors will remain largely unchanged from current U.S. GAAP.  The requirements of this standard include an increase in required disclosures.  This ASU was effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years.  Lessees and lessors were required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” which provided clarifications and improvements to ASC 842, including allowing entities to elect an additional transition method with which to adopt ASC 842. The approved transition method enables entities to apply the transition requirements at the effective date of ASC 842 (rather than at the beginning of the earliest comparative period presented as currently required) with the effect of the initial application of ASC 842 recognized as a cumulative-effect adjustment to retained earnings in the period of adoption. As a result, an entity’s reporting for the comparative periods presented in the year of adoption would continue to be in accordance with ASC 840, including the disclosure requirements of ASC 840. The Company adopted ASC 842 on January 1, 2019 using this transition method.
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The new guidance provides a number of optional practical expedients in the transition. The Company had elected the package of practical expedients, which among other things, allows the carryforward of the historical lease classification. Further, upon implementation of the new guidance, the Company has elected the practical expedients to combine lease and non-lease components and to not recognize right-of-use assets and lease liabilities for short-term leases.  Upon adoption of ASC 842 on January 1, 2019, the Company recorded a right-of-use asset of $9,710 and an operating lease liability of $13,095 in the Consolidated Balance Sheets. Refer to Note 13 — Leases for further information regarding our operating lease agreement and the effect of the adoption of ASC 842 from a lessor perspective.  

Pursuant to ASC 842, the Company has identified revenue from its time charter agreements as lease revenue.  Refer to Note 12 — Voyage revenues for additional information regarding the adoption of ASC 842 from a lessor perspective.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “ASC 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption (the “modified retrospective transition method”). The Company adopted ASC 606 during the first quarter of 2018 using the modified retrospective transition method applied to all contracts and determined that the only impact was to spot market voyage charter contracts that were not completed as of January 1, 2018. Upon adoption, the Company recognized the cumulative effect of adopting this guidance as an adjustment to its opening balance of accumulated deficit as of January 1, 2018. Prior periods were not retrospectively adjusted. The adoption of ASC 606 did not have a financial impact on the recognition of revenue generated from time charter agreements, spot market-related time charters and pool agreements. Refer to Note 12 — Voyage Revenues for further discussion of the financial impact on the Company’s consolidated financial statements.

3 - CASH FLOW INFORMATION

For the year ended December 31, 2020, the Company had non-cash investing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $857 for the Purchase of vessels and ballast water treatment systems, including deposits, $5 for the Purchase of scrubbers, $142 for the Purchase of other fixed assets and $99 for the Net proceeds from sale of vessels. For the year ended December 31, 2020, the Company had non-cash financing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $114 for Cash dividends paid.

For the year ended December 31, 2019, the Company had non-cash investing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $548 for the Purchase of vessels and ballast water treatment systems, including deposits, $9,520 for the Purchase of scrubbers, $413 for the Purchase of other fixed assets and $118 for the Net proceeds from sale of vessels. For the year ended December 31, 2019, the Company had non-cash financing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $74 for Cash dividends paid.

For the year ended December 31, 2018, the Company had non-cash investing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $2,228 for the Purchase of vessels and ballast water treatment systems, including deposits, $428 for the Purchase of Scrubbers, $262 for the Net proceeds from sale of vessels and $360 for the Purchase of other fixed assets. For the year ended December 31, 2018, the Company had non-cash financing activities not included in the Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $105 for the Payment of common stock issuance costs and $1 for Payment of deferred financing costs.
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During the year ended December 31, 2020, the Company made a reclassification of $22,408 from Vessels, net of accumulated depreciation to Vessels held for sale as the Company entered into agreements to sell the Baltic Panther, the Baltic Hare and the Baltic Cougar prior to December 31, 2020. Additionally, during the year ended December 31, 2020, the Company made a reclassification of $38,214 from Vessels, net of accumulated depreciation to Vessels held for exchange as the Company entered into an agreement to exchange the Baltic Cove, the Baltic Fox, the Genco Avra, the Genco Mare and the Genco Spirit prior to December 31, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions.

During the year ended December 31, 2019, the Company made a reclassification of $10,303 from Vessels, net of accumulated depreciation and Fixed assets, net of accumulated depreciation to Vessels held for sale due to the approval by the Board of Directors to sell the Genco Thunder prior to December 31, 2019. Refer to Note 4 — Vessel Acquisitions and Dispositions.

During the year ended December 31, 2018, the Company made a reclassification of $5,702 from Vessels, net of accumulated depreciation to Vessels held for sale due to the approval by the Board of Directors to sell the Genco Vigour prior to December 31, 2018. Refer to Note 4 — Vessel Acquisitions and Dispositions.

During the years ended December 31, 2020, 2019 and 2018, cash paid for interest, excluding the PIK interest paid as a result of the refinancing of the $400 Million Credit Facility, was $18,420, $28,376 and $30,167, respectively. Refer to Note 7 — Debt.

During the years ended December 31, 2020, 2019 and 2018, there was no cash paid for income taxes.

On July 15, 2020, the Company issued 42,642 restricted stock units to certain members of the Board of Directors. The aggregate fair value of these restricted stock units was $255.

On February 25, 2020, the Company issued 173,749 restricted stock units and options to purchase 344,568 shares of the Company’s stock at an exercise price of $7.06 to certain individuals. The fair value of these restricted stock units and stock options were $1,227 and $693, respectively.

On May 15, 2019, the Company issued 29,580 restricted stock units to certain members of the Board of Directors.  These restricted stock units vested on July 15, 2020. The aggregate fair value of these restricted stock units was $255.
 
On March 4, 2019, the Company issued 106,079 restricted stock units and options to purchase 240,540 shares of the Company’s stock at an exercise price of $8.065, as adjusted for the special dividend declared on November 5, 2019, to certain individuals. The fair value of these restricted stock units and stock options were $890 and $904, respectively.

On May 15, 2018, the Company issued 14,268 restricted stock units to certain members of the Board of Directors.  These restricted stock units vested on May 15, 2019. The aggregate fair value of these restricted stock units was $255.
 
On February 27, 2018, the Company issued 37,436 restricted stock units and options to purchase 122,608 shares of the Company’s stock at an exercise price of $13.365, as adjusted for the special dividend declared on November 5, 2019, to certain individuals.  The fair value of these restricted stock units and stock options were $512 and $926, respectively.

Refer to Note 16 — Stock-Based Compensation for further information regarding the aforementioned grants.

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4 - VESSEL ACQUISITIONS AND DISPOSITIONS

Vessel Exchange

On December 17, 2020, the Company entered into an agreement to acquire three Ultramax vessels in exchange for six Handysize vessels for a fair value of $46,000 less a 1.0% commission payable to a third party. The Genco Magic, a 2014-built Ultramax vessel, and the Genco Vigilant and the Genco Freedom, both 2015-built Ultramax vessels, were delivered to the Company on December 23, 2020, January 28, 2021 and February 20, 2021, respectively. The Genco Ocean, the Baltic Cove and the Baltic Fox, all 2010-built Handysize vessels, were delivered to the buyers on December 29, 2020, January 30, 2021 and February 2, 2021, respectively. The Genco Spirit, the Genco Avra and the Genco Mare, all 2011-built Handysize vessels, were delivered to the buyers on February 15, 2021, February 21, 2021 and February 24, 2021, respectively. As of December 31, 2020, the vessel assets for the Baltic Cove, the Baltic Fox, the Genco Avra, the Genco Mare and the Genco Spirit have been classified as held for exchange in the Consolidated Balance Sheet.

Vessel Acquisitions

On June 6, 2018, the Company entered into an agreement for the en bloc purchase of four drybulk vessels, including two Capesize drybulk vessels and two Ultramax drybulk vessels for approximately $141,000.  Each vessel was built with a fuel-saving “eco” engine.  The Genco Resolute, a 2015-built Capesize vessel, was delivered on August 14, 2018 and the Genco Endeavour, a 2015-built Capesize vessel, was delivered on August 15, 2018.  The Genco Weatherly, a 2014-built Ultramax vessel, was delivered on July 26, 2018 and the Genco Columbia, a 2016-built Ultramax vessel, was delivered on September 10, 2018. The Company utilized a combination of cash on hand and proceeds from the $133 Million Credit Facility to finance the purchase.
 
On July 12, 2018, the Company entered into agreements to purchase two 2016-built Capesize drybulk vessels for an aggregate purchase price of $98,000.  The Genco Defender was delivered on September 6, 2018, and the Genco Liberty was delivered on September 11, 2018. The Company utilized a combination of cash on hand and proceeds from the $133 Million Credit Facility to finance the purchase.

Vessel Dispositions

During November 2020, the Company entered into agreements to sell the Baltic Cougar, the Baltic Hare and the Baltic Panther. These vessels have been classified as held for sale in the Consolidated Balance Sheet as of December 31, 2020. The sale of the Baltic Hare, Baltic Panther and Baltic Cougar were completed on January 15, 2021, January 4, 2021 and February 24, 2021, respectively.

During the fourth quarter of 2020, the Company completed the sale of the Genco Bay, the Baltic Jaguar, the Genco Loire and the Genco Normandy on October 1, 2020, October 16, 2020, November 18, 2020 and December 8, 2020, respectively. During the third quarter of 2020, the Company completed the sale of the Baltic Wind and Baltic Breeze on July 7, 2020 and July 31, 2020, respectively. During the first quarter of 2020, the Company completed the sale of the Genco Charger and Genco Thunder on February 24, 2020 and March 5, 2020, respectively.

On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder. The vessel assets have been classified as held for sale in the Consolidated Balance Sheets as of December 31, 2019.
 
As of December 31, 2020, the Genco Normandy, Genco Loire, Baltic Jaguar, Genco Bay, Baltic Breeze, Baltic Wind, Genco Thunder and Genco Charger served as collateral under the $495 Million Credit Facility; therefore $35,492 of the net proceeds received from the sale of these vessels will remain classified as restricted cash for 360 days following the respective sale dates, which has been reflected as restricted cash in the Consolidated Balance Sheet as of December 31, 2020. Refer to Note 7 — Debt for amendment to the $495 Million Credit Facility.

During the fourth quarter of 2019, the Company completed the sale of the Genco Challenger, the Genco Champion and Genco Raptor on October 10, 2019, October 21, 2019 and December 10, 2019. The Genco Champion and Genco Challenger served as collateral under the $495 Million Credit Facility; therefore, $6,880 of the net proceeds
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from the sale of these two vessels was required to be used as a loan prepayment since a replacement vessel was not going to be added as collateral within 180 days following the sales dates. Additionally, the Genco Raptor served as collateral under the $495 Million Credit Facility. As of December 31, 2019, a total amount of $6,045 was reflected as restricted cash in the Consolidated Balance Sheet for the Genco Raptor. The Company made a $6,045 loan prepayment for the Genco Raptor on December 7, 2020 pursuant to the terms of the $495 Million Credit Facility. These amounts can be used towards the financing of a replacement vessel or vessels meeting certain requirements and added as collateral under the facility. If such a replacement vessel is not added as collateral within such 360 day period, the Company will be required to use the proceeds as a loan prepayment.  Refer to Note 7 — Debt for further information.

On November 23, 2018, the Company entered into an agreement to sell the Genco Vigour, a 1999-built Panamax vessel, to a third party for $6,550 less a 2.0% broker commission payable to a third party.  The sale was completed on January 28, 2019. 

On November 21, 2018, the Company entered into an agreement to sell the Genco Knight, a 1999-built Panamax vessel, to a third party for $6,200 less a 3.0% broker commission payable to a third party.  The sale was completed on December 26, 2018.

On November 15, 2018, the Company entered into an agreement to sell the Genco Beauty, a 1999-built Panamax vessel, to a third party for $6,560 less a 3.0% broker commission payable to a third party.  The sale was completed on December 17, 2018.

On October 31, 2018, the Company entered into an agreement to sell the Genco Muse, a 2001-built Handymax vessel, to a third party for $6,660 less a 2.0% broker commission payable to a third party.  The sale was completed on December 5, 2018.

On August 30, 2018, the Company entered into an agreement to sell the Genco Cavalier, a 2007-built Supramax vessel, to a third party for $10,000 less a 2.5% broker commission payable to a third party.  The sale was completed on October 16, 2018.  This vessel served as collateral under the $495 Million Credit Facility; therefore, $4,947 of the net proceeds received from the sale was required to be used as a loan prepayment under the $495 Million Credit Facility which was made on April 15, 2019. Refer to Note 7 — Debt for further information. 
 
On July 24, 2018, the Company entered into an agreement to sell the Genco Surprise, a 1998-built Panamax vessel, for $5,300 less a 3.0% broker commission payable to a third party.  The sale was completed on August 7, 2018.
 
On June 27, 2018, the Company reached agreements to sell the Genco Explorer and the Genco Progress, both 1999-built Handysize vessels, to a third party for $5,600 each less a 3.0% broker commission payable to a third party.  The sale of the Genco Progress was completed on September 13, 2018 and the sale of the Genco Explorer was completed on November 13, 2018.
 
With the exception of the Genco Cavalier, the aforementioned six vessels that were sold during the year ended December 31, 2018 and the Genco Vigour did not serve as collateral under any of the Company’s credit facilities; therefore the Company was not required to pay down any indebtedness with the proceeds from the sales. 

Refer to the “Impairment of vessel assets” and the “Loss (gain) on sale of vessels” sections in Note 2 — Summary of Significant Accounting Policies for discussion of impairment expense and the loss (gain) on sale of vessels recorded during the years ended December 31, 2020, 2019 and 2018 for the aforementioned vessels.

5 - NET LOSS PER SHARE

The computation of basic net loss per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net loss per share assumes the vesting of nonvested stock awards and the exercise of stock options (refer to Note 16 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. There were 298,834, 162,096 and 149,170 shares of
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restricted stock and restricted stock units excluded from the computation of diluted net loss per share during the years ended December 31, 2020, 2019 and 2018, respectively, because they were anti-dilutive. There were 837,338, 496,148 and 255,608 stock options excluded from the computation of diluted net loss per share during the years ended December 31, 2020, 2019 and 2018, respectively, because they were anti-dilutive. (refer to Note 16 — Stock-Based Compensation)

The Company’s diluted net loss per share will also reflect the assumed conversion of the equity warrants issued when the Company emerged from bankruptcy on July 9, 2014 (the “Effective Date”) and MIP Warrants issued by the Company (refer to Note 16 — Stock-Based Compensation) if the impact is dilutive under the treasury stock method. The equity warrants have a 7-year term which commenced on the day following the Effective Date and are exercisable for one tenth of a share of the Company’s common stock. All MIP Warrants during the years ended December 31, 2020, 2019 and 2018 were excluded from the computation of diluted net loss per share because they were anti-dilutive. The MIP Warrants expired on August 7, 2020. There were 3,936,761 equity warrants excluded from the computation of diluted net loss per share during the years ended December 31, 2020, 2019 and 2018 because they were anti-dilutive.

The components of the denominator for the calculation of basic and diluted net loss per share are as follows:

									
		For the Years Ended December 31,			
	 	2020	    	2019	  	2018		 	
									
Common shares outstanding, basic:									
Weighted-average common shares outstanding, basic		41,907,597	 	41,762,893		38,382,599			
									
Common shares outstanding, diluted:									
Weighted-average common shares outstanding, basic		41,907,597	 	41,762,893		38,382,599			
									
Dilutive effect of warrants		—	 	—		—			
									
Dilutive effect of stock options		—		—		—			
									
Dilutive effect of restricted stock awards		—	 	—		—			
									
Weighted-average common shares outstanding, diluted		41,907,597	 	41,762,893		38,382,599			

6 - RELATED PARTY TRANSACTIONS

During the years ended December 31, 2020, 2019 and 2018, the Company did not identify any related party transactions.

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7 - DEBT

Long-term debt consists of the following:

		December 31, 		December 31, 		
	    	2020	    	2019	 	
Principal amount	 	$	449,228	 	$	495,824		
Less: Unamortized debt financing costs		 	(9,653)		 	(13,094)		
Less: Current portion		 	(80,642)		 	(69,747)		
								
Long-term debt, net	 	$	358,933	 	$	412,983		

		December 31, 2020		December 31, 2019		
					Unamortized					Unamortized		
					Debt Issuance					Debt Issuance		
	    	Principal	    	Cost	    	Principal	    	Cost	 	
$495 Million Credit Facility		$	334,288		$	8,222		$	395,724		$	11,642		
$133 Million Credit Facility			114,940			1,431			100,100			1,452		
														
Total debt		$	449,228	 	$	9,653		$	495,824	 	$	13,094		

As of December 31, 2020 and 2019, $9,653 and $13,094 of deferred financing costs, respectively, were presented as a direct deduction within the outstanding debt balance in the Company’s Consolidated Balance Sheets. Amortization expense for deferred financing costs for the years ended December 31, 2020, 2019 and 2018 was $3,903, $3,788 and $3,035, respectively. This amortization expense is recorded as a component of Interest expense in the Consolidated Statements of Operations.

Effective June 5, 2018, the portion of the unamortized deferred financing costs for the $400 Million Credit Facility and 2014 Term Loan Facilities that was identified as a debt modification, rather than an extinguishment of debt, is being amortized over the life of the $495 Million Credit Facility in accordance with ASC 470-50. During the year ended December 31, 2018, the Company paid $2,962 of debt extinguishment costs in relation to the refinancing of the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities with the $495 Million Credit Facility.

On November 5, 2019, the Company entered into amendments with its lenders to the dividend covenants of the credit agreements for the $495 Million Credit Facility and the $133 Million Credit Facility.  Under the terms of these two facilities as so amended, dividends or repurchases of our stock are subject to customary conditions.  The Company may pay dividends or repurchase stock under these facilities to the extent its total cash and cash equivalents are greater than $100,000 and 18.75% of our total indebtedness, whichever is higher; if the Company cannot satisfy this condition, the Company is subject to a limitation of 50% of consolidated net income for the quarter preceding such dividend payment or stock repurchase if the collateral maintenance test ratio is 200% or less for such quarter, for which purpose the full commitment of up to $35,000 of the scrubber tranche under the $495 Million Credit Facility is assumed to be drawn.
 
$133 Million Credit Facility

On August 14, 2018, the Company entered into a five-year senior secured credit facility (the “$108 Million Credit Facility”) with Crédit Agricole Corporate & Investment Bank (“CACIB”), as Structurer and Bookrunner, CACIB and Skandinaviska Enskilda Banken AB (Publ) as Mandate Lead Arrangers, CACIB as Administrative Agent and as Security Agent, and the other lenders party thereto from time to time. The Company has used proceeds from the $108 Million Credit Facility to finance a portion of the purchase price for the six vessels, including four Capesize Vessels and two Ultramax vessels, which were delivered to the Company during the three months ended September 30, 2018 (refer to Note 4 — Vessel Acquisitions and Dispositions). These six vessels also serve as collateral under the $108 Million
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Credit Facility. The Company drew down a total of $108,000 during the third quarter of 2018, which represents 45% of the appraised value of the six vessels.

On June 11, 2020, the Company entered into an amendment and restatement agreement to the $108 Million Credit Facility which provided for a revolving credit facility of up to $25,000 (the “Revolver”) for general corporate and working capital purposes (as so amended, the $133 Million Credit Facility”). On June 15, 2020, the Company drew down $24,000 under the Revolver.

The $133 Million Credit Facility provides for the following key terms in relation to the $108,000 tranche:

	●	The final maturity date is August 14, 2023.	

	●	Borrowings bear interest at London Interbank Offered Rate (“LIBOR”) plus 2.50% through September 30, 2019 and LIBOR plus a range of 2.25% to 2.75% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months EBITDA.	

	●	Scheduled amortization payments reflect a repayment profile whereby the facility shall have been repaid to nil when the average vessel aged of the collateral vessels reaches 20 years. Based on this, the required repayments are $1,580 per quarter commencing on December 31, 2018, with a final balloon payment on the maturity date.	

	●	Mandatory prepayments are to be applied to remaining amortization payments pro rata, while voluntary prepayments are to be applied to remaining amortization payments in order of maturity.	

The $133 Million Credit Facility provides for the following key terms in relation to the $25,000 Revolver tranche:

	●	The final maturity date of the Revolver is August 14, 2023.	

	●	Borrowings under the Revolver may be incurred pursuant to multiple drawings on or prior to July 1, 2023 in minimum amounts of $1,000	

	●	Borrowings under the Revolver will bear interest at LIBOR plus 3.00%	

	●	The Revolver is subject to consecutive quarterly commitment reductions commencing on the last day of the fiscal quarter ending September 30, 2020 in an amount equal to approximately $1.9 million each quarter.	

	●	Borrowings under the Revolver are subject to a limit of 60% for the ratio of outstanding total term and revolver loans to the aggregate appraised value of collateral vessels under the $133 Million Credit Facility.	

The $133 Million Credit Facility provides for the following key terms:

	●	Pursuant to the November 5, 2019 amendment, the Company may pay dividends or repurchase stock to the extent the Company’s total cash and cash equivalents are greater than $100,000 and 18.75% of its total indebtedness, whichever is higher; if the Company cannot satisfy this condition, the Company is subject to a limitation of 50% of consolidated net income for the quarter preceding such dividend payment or stock repurchase if the collateral maintenance test ratio is 200% or less for such quarter.	

	●	Acquisitions and additional indebtedness are allowed subject to compliance with financial covenants (including a collateral maintenance test) and other customary conditions.	

	●	Key financial covenants are substantially similar to those under the Company’s $495 Million Credit Facility and include:	

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	●	minimum liquidity, with unrestricted cash and cash equivalents to equal or exceed the greater of $30,000 and 7.5% of total indebtedness;	

	●	minimum working capital, with consolidated current assets (excluding restricted cash) minus consolidated current liabilities (excluding the current portion of long-term indebtedness) to be not less than zero;	

	●	debt to capitalization, with the ratio of total indebtedness to total capitalization to be not more than 70%; and	

	●	collateral maintenance, with the aggregate appraised value of collateral vessels to be at least 135% of the principal amount of the loan outstanding under the $133 Million Credit Facility.	

As of December 31, 2020, there was no availability under the $133 Million Credit Facility. Total debt repayments of $9,160, $6,320 and $1,580 were made during the years ended December 31, 2020, 2019 and 2018, respectively, under the $133 Million Credit Facility. As of December 31, 2020 and 2019, the total outstanding net debt balance was $113,509 and $98,648, respectively.

As of December 31, 2020, the Company was in compliance with all of the financial covenants under the $133 Million Credit Facility.

The following table sets forth the scheduled repayment of the outstanding principal debt of $114,940 as of December 31, 2020 under the $133 Million Credit Facility:

Year Ending December 31, 	    	Total	 	
					
2021		$	14,000		
2022			14,000		
2023		 	86,940		
					
Total debt		$	114,940		

$495 Million Credit Facility

On May 31, 2018, the Company entered into a five-year senior secured credit facility for an aggregate amount of up to $460,000 with Nordea Bank AB (publ), New York Branch (“Nordea”), as Administrative Agent and Security Agency, the various lenders party thereto, and Nordea, Skandinaviska Enskilda Banken AB (publ), ABN AMRO Capital USA LLC, DVB Bank SE, Crédit Agricole Corporate & Investment Bank, and Danish Ship Finance A/S as Bookrunners and Mandated Lead Arrangers. Deutsche Bank AG Filiale Deutschlandgeschäft, and CTBC Bank Co. Ltd. are Co-Arrangers under this facility. On June 5, 2018, proceeds of $460,000 under this facility were used, together with cash on hand, to refinance all of the Company’s existing credit facilities (the $400 Million Credit Facility, $98 Million Credit Facility and 2014 Term Loan Facilities) into one facility, and pay down the debt on seven of the Company’s oldest vessels, which have been identified for sale.

On February 28, 2019, the Company entered into an Amendment and Restatement Agreement (the “Amendment”) for this credit facility (the “$495 Million Credit Facility”) with Nordea Bank AB (publ), New York Branch  (“Nordea”), as Administrative Agent and Security Agent, the various lenders party thereto, and Nordea, Skandinaviska Enskilda Banken AB (publ), ABN AMRO Capital USA LLC, DVB Bank SE, Crédit Agricole Corporate & Investment Bank, and Danish Ship Finance A/S  as Bookrunners and Mandated Lead Arrangers.  The Amendment provides for an additional tranche up to $35,000 to finance a portion of the acquisitions, installations, and related costs for scrubbers for 17 of the Company’s Capesize vessels.  On August 28, 2019, September 23, 2019 and March 12, 2020, the Company made total drawdowns of $9,300, $12,200 and $11,250, respectively, under the $35 Million tranche of the $495 Million Credit Facility.
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On December 7, 2020, the Company utilized $6,045 of the proceeds from the sale of the Genco Raptor which was classified as restricted cash as of December 31, 2019 as a loan prepayment under the $495 Million Credit Facility. On November 15, 2019, the Company utilized $6,880 of the proceeds from the sale of the Genco Challenger and Genco Champion which were sold during the fourth quarter of 2019 as a loan prepayment under the $495 Million Credit Facility. Additionally, on April 15, 2019, the Company utilized $4,947 of the proceeds from the sale of the Genco Cavalier that was classified as restricted cash as of December 31, 2018 as a loan prepayment under the $495 Million Credit Facility.  Under the terms of the $495 Million Credit Facility, the amount received from the proceeds of the sale of a collateralized vessel can be used towards the financing of a replacement vessel or vessels meeting certain requirements and added as collateral under the facility.  However, since a replacement vessel was not added as collateral within the period stipulated in the $495 Million Credit Facility which was revised as noted below, the Company was required to utilize the proceeds as a loan prepayment. 

On December 17, 2020, the Company entered into an amendment to the $495 Million Credit Facility that allowed the Company to enter into a vessel transaction in which the Company agreed to acquire three Ultramax vessels in exchange for six of the Company’s Handysize vessels. Refer to Note 4 — Vessel Acquisitions and Dispositions.

The $495 Million Credit Facility provides for the following key terms in relation to the $460,000 tranche:

	●	The final maturity date is May 31, 2023.	

	●	Borrowings bear interest at LIBOR plus 3.25% through December 31, 2018 and LIBOR plus a range of 3.00% and 3.50% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months EBITDA. Original scheduled amortization payments were $15,000 per quarter commencing on December 31, 2018, with a final payment of $190,000 due on the maturity date. As a result of the loan prepayments for the vessel sales as noted above, scheduled amortization payments were recalculated in accordance with the terms of the facility. Scheduled amortization payments were revised to $14,321 which commenced on December 30, 2019, with a final payment of $182,440 due on the maturity date.	

	●	Scheduled amortization payments may be recalculated upon the Company’s request based on changes in collateral vessels, prepayments of the loan made as a result of a collateral vessel disposition as part of the Company’s fleet renewal program, or voluntary prepayments, subject in each case to a minimum repayment profile under which the loan will be repaid to nil when the average age of the vessels serving as collateral from time to time reaches 17 years.  Mandatory prepayments are applied to remaining amortization payments pro rata, while voluntary prepayments are applied to remaining amortization payments in order of maturity.	

	●	Acquisitions and additional indebtedness are allowed subject to compliance with financial covenants, a collateral maintenance test, and other customary conditions.	

The $495 Million Credit Facility provides for the following key terms in relation to the $35,000 tranche:

	●	The final maturity date is May 31, 2023.	

	●	Borrowings under the tranche may be incurred pursuant to multiple drawings on or prior to March 30, 2020 in minimum amounts of $5,000 and may be used to finance up to 90% of the scrubber costs noted above.	

	●	Borrowings under the tranche will bear interest at LIBOR plus 2.50% through September 30, 2019 and LIBOR plus a range of 2.25% to 2.75% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months’ EBITDA.	

	●	The tranche is subject to equal consecutive quarterly repayments commencing on the last day of the fiscal quarter ending March 31, 2020 in an amount reflecting a repayment profile whereby the loans shall have	
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		been repaid after four years calculated from March 31, 2020. Assuming that the full $35,000 is borrowed, each quarterly repayment amount was originally scheduled to be equal to $2,500.  However, as a result of the loan prepayments for the vessel sales as noted above, the availability under the $35,000 tranche was reduced to $34,025.  The Company drew down $32,750 and, as a result of the loan prepayments for the vessel sales as noted above, scheduled quarterly amortization repayments were revised to $2,339 which commenced on March 31, 2020, with a final payment of $1,904 due on the maturity date. 	

The $495 Million Credit Facility provides for the following key terms:

	●	Pursuant to the November 5, 2019 amendment, the Company may pay dividends or repurchase stock to the extent the Company’s total cash and cash equivalents are greater than $100,000 and 18.75% of the Company’s total indebtedness, whichever is higher; if the Company cannot satisfy this condition, the Company is subject to a limitation of 50% of consolidated net income for the quarter preceding such dividend payment if the collateral maintenance test ratio is 200% or less for such quarter, with the full commitment of up to $35,000 of the scrubber tranche assumed to be drawn.	

	●	Collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral within 120 days of such sale or disposition.  On February 13, 2019 and June 5, 2020, the Company entered into amendments with its lenders to extend this period to 180 days and 360 days, respectively. In addition:	

	●	the Company must be in compliance with the collateral maintenance test;	

	●	the replacement vessels must become collateral for the loan; and either	

	●	the replacement vessels must have an equal or greater appraised value that the collateral vessels for which they are substituted, or	

	●	ratio of the aggregate appraised value of the collateral vessels (including replacement vessels) to the outstanding loan amount after the collateral disposition (accounting for any prepayments of the loan by the time the replacement vessels become collateral vessels) must equal or exceed the aggregate appraised value of the collateral vessels to the outstanding loan before the collateral disposition.	

	●	Key financial covenants include:	

	●	minimum liquidity, with unrestricted cash and cash equivalents to equal or exceed the greater of $30,000 and 7.5% of total indebtedness (no restricted cash is required);	

	●	minimum working capital, with consolidated current assets (excluding restricted cash) minus consolidated current liabilities (excluding the current portion of long-term indebtedness) to be not less than zero;	

	●	debt to capitalization, with the ratio of total indebtedness to total capitalization to be not more than 70%; and	

	●	collateral maintenance, with the aggregate appraised value of collateral vessels to be at least 135% of the principal amount of the loan outstanding under the $495 Million Credit Facility.	

	●	Collateral includes the current vessels in the Company’s fleet other than the seven oldest vessels in the fleet which have been identified for sale, collateral vessel earnings and insurance, and time charters in excess of 24 months in respect of the collateral vessels.	

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As of December 31, 2020, there was no availability under the $495 Million Credit Facility. Total debt repayments of $72,686, $70,776 and $15,000 were made during the years ended December 31, 2020, 2019 and 2018, respectively, under the $495 Million Credit Facility. As of December 31, 2020 and December 31, 2019, the total outstanding net debt balance was $326,066 and $384,082, respectively.

As of December 31, 2020, the Company was in compliance with all of the financial covenants under the $495 Million Credit Facility.

The following table sets forth the scheduled repayment of the outstanding principal debt of $334,288 as of December 31, 2020 under the $495 Million Credit Facility:

					
Year Ending December 31, 	    	Total		
					
2021		$	66,642		
2022			66,642		
2023			201,004		
					
Total debt		$	334,288		

Prior Credit Facilities

On June 5, 2018, the $495 Million Credit Facility was used to refinance the Company’s prior credit facilities, the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities. Total debt repayments of $404,941 (which includes $5,341 of PIK interest), $93,939 and $25,544 were made during the year ended December 31, 2018 under the $400 Million Credit Facility, the $98 Million Credit Facility and the 2014 Term Loan Facilities, respectively. As of December 31, 2020 and 2019, there was no outstanding debt under these prior credit facilities.

Interest rates

The following tables set forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the costs associated with unused commitment fees, if applicable. The following tables also include the range of interest rates on the debt, excluding the impact of unused commitment fees, if applicable:

		For the Years Ended December 31,		
	    	2020		2019		2018		
Effective Interest Rate		3.71	%  	5.31	%  	5.71	%  	
Range of Interest Rates (excluding unused commitment fees)		2.65 % to 3.50	%  	4.05 % to 5.76	%  	3.83 % to 8.43	%  	

Letter of credit

In conjunction with the Company entering into a long-term office space lease (See Note 13 — Leases), the Company was required to provide a letter of credit to the landlord in lieu of a security deposit. As of September 21, 2005, the Company obtained an annually renewable unsecured letter of credit with DnB NOR Bank at a fee of 1% per annum. During September 2015, the Company replaced the unsecured letter of credit with DnB NOR Bank with an unsecured letter of credit with Nordea Bank Finland Plc, New York and Cayman Island Branches (“Nordea”) in the same amount at a fee of 1.375% per annum. The letter of credit outstanding was $300 as of December 31, 2020 and 2019 at a fee of 1.375% per annum. The letter of credit is cancelable on each renewal date provided the landlord is given 30 days minimum notice. As of December 31, 2020 and 2019, the letter of credit outstanding has been securitized by $315 that
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was paid by the Company to Nordea during the year ended December 31, 2015. These amounts have been recorded as restricted cash included in total noncurrent assets in the Consolidated Balance Sheets as of December 31, 2020 and 2019.

-

8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values and carrying values of the Company’s financial instruments as of December 31, 2020 and 2019 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

		December 31, 2020		December 31, 2019		
	    	Carrying	    			    	Carrying	    			 	
	    	Value	    	Fair Value	    	Value	    	Fair Value	 	
Cash and cash equivalents		$	143,872		$	143,872		$	155,889		$	155,889		
Restricted cash		 	35,807		 	35,807		 	6,360		 	6,360		
Principal amount of floating rate debt		 	449,228		 	449,228		 	495,824		 	495,824		

The carrying value of the borrowings under the $495 Million Credit Facility and the $133 Million Credit Facility as of December 31, 2020 and 2019 approximate their fair value due to the variable interest nature thereof as each of these credit facilities represent floating rate loans. Refer to Note 7 — Debt for further information regarding the Company’s credit facilities. The carrying amounts of the Company’s other financial instruments as of December 31, 2020 and 2019 (principally Due from charterers and Accounts payable and accrued expenses) approximate fair values because of the relatively short maturity of these instruments.

ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the consolidated financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment. The three levels are defined as follows:

	●	Level 1—Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.	

	●	Level 2—Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.	

	●	Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.	

Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could obtain for similar debt or based upon transactions amongst third parties. Nonrecurring fair value measurements include vessel impairment assessments completed during the interim period and at year-end as determined based on third party quotes, which are based off of various data points, including comparable sales of similar vessels, which are Level 2 inputs. During the years ended December 31, 2020, 2019 and 2018, the vessels assets for 30, five and ten of the Company’s vessels, respectively, were written down as part of the impairment recorded during the years ended December 31, 2020, 2019 and 2018, respectively.   The vessels held for sale and vessels held for exchange as of December 31, 2020 and 2019 were written down as part of the impairment recorded during the years ended December
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31, 2020 and 2019, respectively. Refer to “Impairment of long-lived assets,” “Vessels held for sale” and “Vessels held for exchange” sections in Note 2 — Summary of Significant Accounting Policies.  

Nonrecurring fair value measurements also include impairment tests conducted by the Company during the years ended December 31, 2020 and 2019 of its operating lease right-of use asset.  The fair value determination for the operating lease right-of-use asset was based on third party quotes, which is considered a Level 2 input.  During the year ended December 31, 2020, there was no impairment of the operating lease right-of-use assets. During the year ended December 31, 2019, the operating lease right-of-use asset was written down as part of the impairment of right-of-use asset recorded during the year ended December 31, 2019.  Refer to Note 13 — Leases. 

The Company did not have any Level 3 financial assets or liabilities as of December 31, 2020 and 2019.

9 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

	    	December 31, 	    	December 31, 		
	    	2020	    	2019	 	
Vessel stores		$	501		$	638		
Capitalized contract costs			1,669			1,952		
Prepaid items		 	2,998		 	2,870		
Insurance receivable		 	1,917		 	2,039		
Advance to agents			1,466			1,162		
Other		 	2,305		 	1,388		
Total prepaid expenses and other current assets		$	10,856		$	10,049		

10 - FIXED ASSETS

Fixed assets consist of the following:

	    	December 31, 	    	December 31, 		
	    	2020	    	2019	 	
Fixed assets, at cost:								
Vessel equipment		$	6,188		$	7,288		
Furniture and fixtures		 	443		 	467		
Leasehold improvements			1,369			100		
Computer equipment		 	659		 	275		
Total costs		 	8,659		 	8,130		
Less: accumulated depreciation and amortization		 	(2,266)		 	(2,154)		
Total fixed assets, net		$	6,393		$	5,976		

11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

	    	December 31, 	    	December 31, 		
	    	2020	    	2019	 	
Accounts payable		$	11,864		$	26,040		
Accrued general and administrative expenses		 	3,258		 	4,105		
Accrued vessel operating expenses		 	7,671		 	19,459		
Total accounts payable and accrued expenses		$	22,793		$	49,604		

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12 – VOYAGE REVENUES

Total voyage revenues includes revenue earned on fixed rate time charters, spot market voyage charters and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters. For the years ended December 31, 2020, 2019 and 2018, the Company earned $355,560, $389,496 and $367,522 of voyage revenue, respectively.

On January 1, 2018, the Company adopted the revenue recognition guidance under ASC 606 (refer to Note 2 — Summary of Significant Accounting Policies) using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. 
 
As a result of the adoption of the new revenue recognition guidance on January 1, 2018, the Company recorded a net increase to the opening accumulated deficit of $659 for the cumulative impact of adopting the new guidance.  The impact related primarily to the change in accounting for spot market voyage charters.  Prior to the adoption of the new guidance, revenue for spot market voyage charters was recognized ratably over the total transit time of the voyage, which previously commenced the latter of when the vessel departed from its last discharge port and when an agreement was entered into with the charterer, and ended at the time the discharge of cargo was completed at the discharge port.  As a result of the adoption of the new guidance, revenue for spot market voyage charters is now being recognized ratably over the total transit time of the voyage which now begins when the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port in accordance with ASC 606.  Spot market voyage charter agreements do not provide the charterers with substantive decision-making rights to direct how and for what purpose the vessel is used, therefore revenue from spot market voyage charters is not within the scope of ASC 842. Additionally, the Company has identified that the contract fulfillment costs of spot market voyage charters consist primarily of the fuel consumption that is incurred by the Company from the latter of the end of the previous vessel employment and the contract date until the arrival at the loading port, in addition to any port expenses incurred prior to arrival at the load port, as well as any charter hire expenses for third party vessels that are chartered-in.  The fuel consumption and any port expenses incurred prior to arrival at the load port during this period is capitalized and recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets and is amortized ratably over the total transit time of the voyage from arrival at the loading port until the vessel departs from the discharge port and expensed as part of Voyage Expenses.  Similarly, for any third party vessels that are chartered-in, the charter hire expenses during this period are capitalized and recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets and are amortized and expensed as part of Charter hire expenses. Refer also to Note 9 — Prepaid Expenses and Other Current Assets.

During time charter agreements, including fixed rate time charters and spot market-related time charters, the charterers have substantive decision-making rights to direct how and for what purpose the vessel is used.  As such, the Company has identified that time charter agreements contain a lease in accordance with ASC 842.  During time charter agreements, the Company is responsible for operating and maintaining the vessels.  These costs are recorded as vessel operating expenses in the Consolidated Statements of Operations.  The Company has elected the practical expedient that allows the Company to combine lease and non-lease components under ASC 842 as the Company believes (1) the timing and pattern of recognizing revenues for operating the vessel is the same as the timing and pattern of recognizing vessel leasing revenue; and (2) the lease component, if accounted for separately, would be classified as an operating lease. 

Total voyage revenue recognized in the Consolidated Statements of Operations includes the following:

											
			For the Years Ended		
			December 31, 		
	    	2020		2019		2018		
Lease revenue		$	78,402		$	108,096		$	168,392		
Spot market voyage revenue			277,158			281,400			199,130		
Total voyage revenues		$	355,560		$	389,496		$	367,522		

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13 – LEASES

Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for its main office in New York, New York. The term of the sub-sublease commenced June 1, 2011 and ended on May 1, 2018. The Company entered into a direct lease with the over-landlord of such office space that commenced immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025. For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitute one lease agreement.

In addition, during October 2017, the Company entered into a lease for office space in Singapore that expired in January 2019. A lease was signed for a new office space in Singapore effective January 17, 2019 for a three-year term.

Lastly, during July 2018, the Company entered into a lease for office space in Copenhagen, which commenced on July 1, 2018 and ended on April 30, 2019. A lease was signed for a new office space in Copenhagen effective May 1, 2019 for a minimum period ending May 1, 2023.

The Company adopted ASC 842 using the transition method on January 1, 2019 (refer to Note 2 — Summary of Significant Accounting Policies) and has identified the aforementioned leases as operating leases. Variable rent expense, such as utilities and escalation expenses, are excluded from the determination of the operating lease liability and the Company has deemed these insignificant. The Company used its incremental borrowing rate as the discount rate under ASC 842 since the rate implicit in the lease cannot be readily determined.

On June 14, 2019, the Company entered into a sublease agreement for a portion of the leased space for its main office in New York, New York that commenced on July 26, 2019 and will end on September 29, 2025. There was a free base rental period for the first four and a half months commencing on July 26, 2019. Following the expiration of the free base rental period, the monthly base sublease income will be $102 per month until September 29, 2025. The sublease income for the portion of the leased space is less than the lease payments due for the space, which has been identified as an indicator of impairment under ASC 360. As such, the right-of-use asset for the subleased portion of the space was written down to its fair value during the second quarter of 2019 which resulted in $223 of impairment charges which has been recorded in Impairment of right-of-asset in the Consolidated Statement of Operations during the year ended December 31, 2019. Sublease income is recorded net with the total operating lease costs in General and administrative expenses in the Consolidated Statements of Operations. There was $1,223 and $72 of sublease income recorded during the years ended December 31, 2020 and 2019, respectively. There was no sublease income recorded for this sublease agreement during the year ended December 31, 2018.

There was $1,912 and $1,884 of operating lease costs recorded during the years ended December 31, 2020 and 2019, respectively, which was recorded in General and administrative expenses in the Consolidated Statements of Operations.

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Supplemental Consolidated Balance Sheet information related to the Company’s operating leases as of December 31, 2020 is as follows:

		December 31, 	 	
		2020	 	
Operating Lease:					
Operating lease right-of-use asset		$	6,882		
					
Current operating lease liabilities		$	1,765		
Long-term operating lease liabilities		 	8,061		
Total operating lease liabilities		$	9,826		
					
Weighted average remaining lease term (years)			4.75		
Weighted average discount rate			5.15	%	

Maturities of operating lease liabilities as of December 31, 2020 are as follows:

		December 31, 	 	
		2020	 	
2021		$	2,230		
2022			2,230		
2023			2,378		
2024		 	2,453		
2025			1,839		
Total lease payments			11,130		
Less imputed interest			(1,304)		
Present value of lease liabilities		$	9,826		

Consolidated Cash Flow information related to leases are as follows:

		For the Year Ended		
		December 31, 		
		2020		2019	 	
Cash paid for amounts included in the measurement of lease liabilities:								
Operating cash flows from operating lease		$	2,230		$	2,230		

Under the previous leasing guidance under ASC 840, rent expense pertaining to this lease for the year ended December 31, 2018 was $1,808.
 
During the second quarter of 2018, the Company began chartering-in third-party vessels.  Under ASC 842, the Company is the lessee in these agreements.  The Company has elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for short-term leases.  During the years ended December 31, 2020, 2019 and 2018, all charter-in agreements for third-party vessels were less than twelve months and considered short-term leases.  Refer to Note 2 — Summary of Significant Accounting Policies for the charter hire expenses recorded during the years ended December 31, 2020, 2019 and 2018 for these charter-in agreements.

14 - COMMITMENTS AND CONTINGENCIES

During the second half of 2018, the Company entered into agreements for the purchase of ballast water treatments systems (“BWTS”) for 36 of its vessels.  The cost of these systems will vary based on the size and
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specifications of each vessel and whether the systems will be installed in China during the vessels’ scheduled drydockings.  Based on the contractual purchase price of the BWTS and the estimated installation fees, the Company estimates the cost of the systems to be approximately $0.9 million for Capesize vessels, $0.6 million for Supramax vessels and $0.5 million for Handysize vessels. These costs will be capitalized and depreciated over the remainder of the life of the vessel.  Prior to any adjustments for vessel impairment and vessel sales, the Company recorded cumulatively $17,009 and $12,783 in Vessel assets in the Consolidated Balance Sheets as of December 31, 2020 and 2019, respectively, related to BWTS additions.  

On December 21, 2018, the Company entered into agreements to install scrubbers on its 17 Capesize vessels. The Company completed scrubber installation on 16 of its Capesize vessels during the year ended December 31, 2019 and the remaining Capesize vessel on January 17, 2020. The cost of each scrubber varied according to the specifications of the Company’s vessels and technical aspects of the installation, among other variables. These costs are being capitalized and depreciated over the remainder of the life of the vessel. The Company recorded cumulatively $42,728 and $41,270 in Vessel assets in the Consolidated Balance Sheets as of December 31, 2020 and 2019, respectively, related to scrubber additions. The Company has entered into an amendment to the $495 Million Credit Facility to provide financing to cover a portion of these expenses, refer to Note 7 — Debt for further information.

15 - SAVINGS PLAN

In August 2005, the Company established a 401(k) plan that is available to U.S. based full-time employees who meet the plan’s eligibility requirements. This 401(k) plan is a defined contribution plan, which permits employees to make contributions up to maximum percentage and dollar limits allowable by IRS Code Sections 401(k), 402(g), 404 and 415 with the Company matching $1.17 for each dollar contributed up to the first six percent of each employee’s salary. The matching contribution vests immediately. For the years ended December 31, 2020, 2019 and 2018, the Company’s matching contributions to this plan were $473, $399 and $380, respectively.

16 - STOCK-BASED COMPENSATION

2014 Management Incentive Plan

In 2014, the Company adopted the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”). An aggregate of 966,806 shares of Common Stock were available for award under the MIP. Awards under the MIP took the form of restricted stock grants and three tiers of MIP Warrants with staggered strike prices based on increasing equity values. On August 7, 2014, pursuant to the MIP, certain individuals were granted MIP Warrants whereby each warrant could be converted on a cashless basis for the amount in excess of the respective strike price. The MIP Warrants were issued in three tranches for 238,066, 246,701, and 370,979 and had exercise prices, as adjusted for dividends declared during the fourth quarter of 2019 and the first quarter of 2020, of $240.89221 (the “$240.89 Warrants”), $267.11051 (the “$267.11 Warrants”) and $317.87359 (the “$317.87 Warrants”) per whole share, respectively. The fair value of each warrant upon emergence from bankruptcy was $7.22 for the $240.89 Warrants, $6.63 for the $267.11 Warrants and $5.63 for the $317.87 Warrants. The aggregate fair value of these awards upon issuance was $54,436.

All warrants were fully vested and the related expense was fully amortized as of January 1, 2018 and expired on August 7, 2020.

2015 Equity Incentive Plan

On June 26, 2015, the Company’s Board of Directors approved the 2015 Equity Incentive Plan for awards with respect to an aggregate of 400,000 shares of common stock (the “2015 Plan”). Under the 2015 Plan, the Company’s Board of Directors, the compensation committee, or another designated committee of the Board of Directors may grant a variety of stock-based incentive awards to the Company’s officers, directors, employees, and consultants. Awards may consist of stock options, stock appreciation rights, dividend equivalent rights, restricted (nonvested) stock, restricted stock units, and unrestricted stock.

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On March 23, 2017, the Board of Directors approved an amendment and restatement of the 2015 Plan (the “Amended 2015 Plan”).  This amendment and restatement increased the number of shares available for awards under the plan from 400,000 to 2,750,000, subject to shareholder approval; set the annual limit for awards to non-employee directors and other individuals as 500,000 and 1,000,000 shares, respectively; and modified the change in control definition.  The Company’s shareholders approved the increase in the number of shares at the Company’s 2017 Annual Meeting of Shareholders on May 17, 2017. As of December 31, 2020, the Company has awarded restricted stock units, restricted stock and stock options under the Amended 2015 Plan.

Stock Options
 
On March 23, 2017, the Company issued options to purchase 133,000 of the Company’s shares of common stock to John C. Wobensmith, Chief Executive Officer and President, with an exercise price of $10.805 per share, as adjusted for the special dividend declared on November 5, 2019.  One third of the options become exercisable on each of the first three anniversaries of October 15, 2016, with accelerated vesting upon a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date.  The fair value of each option was estimated on the date of the grant using the Black-Scholes-Merton pricing formula, resulting in a value of $6.41 per share, or $853 in the aggregate.  The assumptions used in the Black-Scholes-Merton option pricing formula are as follows: volatility of 79.80% (representing a blend of the Company’s historical volatility and a peer-based volatility estimate due to limited trading history since emergence from bankruptcy), a risk-free interest rate of 1.68%, a dividend yield of 0%, and expected life of 3.78 years (determined using the simplified method as outlined in Staff Accounting Bulletin 14 – Share-Based Payment (“SAB Topic 14”) due to lack of historical exercise data). 

On February 27, 2018, the Company issued options to purchase 122,608 of the Company’s shares of common stock to certain individuals with an exercise price of $13.365 per share, as adjusted for the special dividend declared on November 5, 2019.  One third of the options become exercisable on each of the first three anniversaries of February 27, 2018, with accelerated vesting that may occur following a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date.  The fair value of each option was estimated on the date of the grant using the Black-Scholes-Merton pricing formula, resulting in a value of $7.55 per share, or $926 in the aggregate.  The assumptions used in the Black-Scholes-Merton option pricing formula are as follows: volatility of 71.94% (representing a blend of the Company’s historical volatility and a peer-based volatility estimate due to limited trading history post recapitalization of the Company in November 2016), a risk-free interest rate of 2.53%, a dividend yield of 0%, and expected life of 4.00 years (determined using the simplified method as outlined in SAB Topic 14 due to lack of historical exercise data). 

On March 4, 2019, the Company issued options to purchase 240,540 of the Company’s shares of common stock to certain individuals with an exercise price of $8.065 per share, as adjusted for the special dividend declared on November 5, 2019. One third of the options become exercisable on each of the first three anniversaries of March 4, 2019, with accelerated vesting that may occur following a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date. The fair value of each option was estimated on the date of the grant using the Black-Scholes-Merton pricing formula, resulting in a value of $3.76 per share, or $904 in the aggregate. The assumptions used in the Black-Scholes-Merton option pricing formula are as follows: volatility of 55.23% (representing the Company’s historical volatility), a risk-free interest rate of 2.49%, a dividend yield of 0%, and expected life of 4.00 years (determined using the simplified method as outlined in SAB Topic 14 due to lack of historical exercise data).

On February 25, 2020, the Company issued options to purchase 344,568 of the Company’s shares of common stock to certain individuals with an exercise price of $7.06 per share. One third of the options become exercisable on each of the first three anniversaries of February 25, 2020, with accelerated vesting that may occur following a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date. The fair value of each option was estimated on the date of the grant using the Cox-Ross-Rubinstein pricing formula, resulting in a value of $2.01 per share, or $693 in the aggregate. The assumptions used in the Cox-Ross-Rubinstein option pricing formula are as follows: volatility of 53.91% (representing the Company’s historical volatility), a risk-free interest rate of 1.41%, a dividend yield of 7.13%, and expected life of 4 years (determined using the simplified method as outlined in SAB Topic 14 due to lack of historical exercise data).

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For the years ended December 31, 2020, 2019 and 2018, the Company recognized amortization expense of the fair value of these options, which is included in General and administrative expenses, as follows:

		For the Years Ended December 31,		
	 	2020		2019		2018		
General and administrative expenses		$	787		$	850		$	731		

Amortization of the unamortized stock-based compensation balance of $490 as of December 31, 2020 is expected to be $367, $111 and $12 during the years ended December 31, 2021, 2022 and 2023, respectively.  The following table summarizes the unvested option activity for the years ended December 31, 2020, 2019 and 2018:

		For the Years Ended December 31,			
		2020		2019		2018			
				Weighted		Weighted				Weighted		Weighted				Weighted		Weighted			
		Number		Average		Average		Number		Average		Average		Number		Average		Average			
		of		Exercise		Fair		of		Exercise		Fair		of		Exercise		Fair			
	    	Options	    	Price	    	Value	    	Options	    	Price	    	Price	    	Options	    	Price	    	Price			
Outstanding as of January 1 - Unvested	 	322,279	 	$	9.41			4.72		166,942	 	$	13.01			7.25		88,667	 	$	11.13			6.41			
Granted	 	344,568			7.06			2.01		240,540			8.33			3.76		122,608			13.69			7.55			
Exercisable	 	(119,923)			9.87			5.05		(85,203)			12.36			6.96		(44,333)			11.13			6.41			
Exercised	 	—			—			—		—			—			—		—			—			—			
Forfeited	 	(3,378)			8.07			3.76		—			—			—		—			—			—			
																											
Outstanding as of December 31 - Unvested	 	543,546	 	$	7.83		$	2.94		322,279	 	$	9.41		$	4.72		166,942	 	$	13.01		$	7.25			

The following table summarizes certain information about the options outstanding as of December 31, 2020:

			Options Outstanding and Unvested,		Options Outstanding and Exercisable,		
			December 31, 2020		December 31, 2020		
Weighted							Weighted				 			Weighted		
Average	 			Weighted		Average				Weighted		Average		
Exercise Price of	 			Average		Remaining				Average		Remaining		
Outstanding		Number of		Exercise		Contractual		Number of		Exercise		Contractual		
Options	    	Options	    	Price	    	Life	    	Options	    	Price	    	Life	 	
$	8.86	 	543,546		$	7.83		4.72		293,792		$	10.78		3.01		

As of December 31, 2020 and 2019, a total of 837,338 and 496,148 stock options were outstanding, respectively.

Restricted Stock Units

The Company has issued restricted stock units (“RSUs”) to certain members of the Board of Directors and certain executives and employees of the Company, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. As of December 31, 2020 and 2019, 373,588 and 326,247 shares, respectively, of the Company’s common stock were outstanding in respect of the RSUs. Such shares will only be issued in respect of vested RSUs issued to directors when the director’s service with the Company as a director terminates. Such shares of common stock will only be issued to executives and employees when their RSUs vest under the terms of their grant agreements and the Amended 2015 Plan described above.

The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant. In lieu of cash dividends issued for vested and nonvested shares held by certain members of the Board of Directors, the Company will grant additional vested and nonvested RSUs, respectively, which are calculated by dividing the amount of the dividend by the closing price per share of the Company’s common stock on the dividend payment date and will have the same terms as other RSUs issued to
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members of the Board of Directors. The RSUs that have been issued to other individuals vest ratably on each of the three anniversaries of the determined vesting date. The table below summarizes the Company’s unvested RSUs for the years ended December 31, 2020, 2019 and 2018:

																
	2020		2019		2018		
			Weighted				Weighted				Weighted		
	Number of		Average Grant		Number of		Average Grant		Number of		Average Grant		
	RSUs		Date Price		RSUs		Date Price		RSUs	    	Date Price	 	
Outstanding as of January 1	162,096		$	9.26		149,170		$	12.42		220,129		$	11.01		
Granted	221,903			6.80		140,914			8.50		51,704			14.84		
Vested	(83,675)			9.07		(127,988)			12.10		(122,663)			10.92		
Forfeited	(1,490)			8.39		—			—		—			—		
																
Outstanding as of December 31	298,834		$	7.49		162,096		$	9.26		149,170		$	12.42		

The total fair value of the RSUs that vested during the years ended December 31, 2020, 2019 and 2018 was $550, $1,235 and $1,694, respectively. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

The following table summarizes certain information of the RSUs unvested and vested as of December 31, 2020:

Unvested RSUs		Vested RSUs		
December 31, 2020		December 31, 2020		
				Weighted						
		Weighted		Average				Weighted		
		Average		Remaining				Average		
Number of		Grant Date		Contractual		Number of		Grant Date		
RSUs	    	Price	    	Life	    	RSUs	    	Price	 	
298,834		$	7.49		1.59		505,898		$	11.07		

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of December 31, 2020, unrecognized compensation cost of $849 related to RSUs will be recognized over a weighted-average period of 1.59 years.

For the years ended December 31, 2020, 2019 and 2018, the Company recognized nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses as follows:

		For the Years Ended December 31,		
	 	2020		2019		2018		
General and administrative expenses		$	1,239		$	1,207		$	1,489		

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Restricted Stock

Under the 2015 Plan, grants of restricted common stock issued to executives ordinarily vest ratably on each of the three anniversaries of the determined vesting date. As of December 31, 2020, all restricted stock awards under the 2015 Plan were vested. The table below summarizes the Company’s nonvested stock awards for the year ended December 31, 2018 that were issued under the 2015 Plan:

		For the Year Ended December 31,		
		2018		
				Weighted		
		Number of		Average Grant		
		Shares		Date Price		
Outstanding as of January 1		6,802		$	5.20		
Granted		—			—		
Vested		(6,802)			5.20		
Forfeited		—			—		
							
Outstanding as of December 31		—		$	—		

The total fair value of shares that vested under the 2015 Plan during the year ended December 31, 2018 was $60. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

For the years ended December 31, 2020, 2019 and 2018, the Company recognized nonvested stock amortization expense for the 2015 Plan restricted shares, which is included in General and administrative expenses, as follows:

		For the Years Ended December 31,		
		2020		2019		2018	 	
General and administrative expenses		$	—		$	—		$	11		

17 - LEGAL PROCEEDINGS

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows.

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18 - UNAUDITED QUARTERLY RESULTS OF OPERATIONS

In the opinion of the Company’s management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included on a quarterly basis.

		2020	 	
		Quarter Ended (2)	 	
(In thousands, except share and per share amounts)	    	March 31, 	    	June 30, 	    	September 30, 	    	December 31, 	 	
			(3)						(3)			(3)		
Voyage Revenues	 	$	98,336	 	$	74,206	 	$	87,524		$	95,495		
Operating loss			(113,415)			(13,104)			(15,666)			(61,151)		
														
Net loss			(120,350)			(18,204)			(21,098)			(65,921)		
														
Net loss per share - basic (1)	 	$	(2.87)	 	$	(0.43)	 	$	(0.50)		$	(1.57)		
Net loss per share - diluted (1)	 	$	(2.87)	 	$	(0.43)	 	$	(0.50)		$	(1.57)		
Dividends declared per share		$	0.175		$	0.02		$	0.02		$	0.02		
Weighted average common shares outstanding - basic			41,866,357			41,900,901			41,928,682			41,933,926		
Weighted average common shares outstanding - diluted			41,866,357			41,900,901			41,928,682			41,933,926		

		2019		
		Quarter Ended (2)		
(In thousands, except share and per share amounts)		March 31, 		June 30, 		September 30, 		December 31, 		
														
Voyage Revenues		$	93,464		$	83,550		$	103,776		$	108,705		
Operating (loss) income		 	(882)		 	(27,309)		 	(7,772)		 	7,560		
														
Net (loss) income		 	(7,801)		 	(34,476)		 	(14,591)		 	882		
														
Net (loss) earnings per share - basic (1)		$	(0.19)		$	(0.83)		$	(0.35)		$	0.02		
Net (loss) earnings per share - diluted (1)		$	(0.19)		$	(0.83)		$	(0.35)		$	0.02		
Dividends declared per share		$	—		$	—		$	—		$	0.50		
Weighted average common shares outstanding - basic		 	41,726,106		 	41,742,301		 	41,749,200		 	41,832,942		
Weighted average common shares outstanding - diluted		 	41,726,106		 	41,742,301		 	41,749,200		 	41,989,553		

	(1)	Amounts may not total to annual loss because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.	

	(2)	Amounts may not total to annual amounts for the years ended December 31, 2020 and 2019 as reported in the Consolidated Statements of Operations due to rounding.	

	(3)	During the quarters ended March 31, 2020, September 30, 2020 and December 31, 2020, the Company recorded $112,814, $21,896 and $74,225 of Impairment of vessel assets, respectively.	

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19 - SUBSEQUENT EVENTS

On February 24, 2021, the Company announced a regular quarterly dividend of $0.02 per share to be paid on or about March 17, 2021, to shareholders of record as of March 10, 2021.  The aggregate amount of the dividend is expected to be approximately $0.8 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made.

On February 23, 2021, the Company’s Board of Directors awarded grants of 103,599 RSUs and options to purchase 118,552 shares of the Company’s stock at an exercise price of $9.91 to certain individuals under the 2015 Plan.  The awards generally vest ratably in one-third increments on the first three anniversaries of February 23, 2021.

On January 28, 2021 and February 20, 2021, the Company took delivery of the Genco Vigilant and the Genco Freedom, respectively, both 2015-built Ultramax vessels. On January 30, 2021 and February 2, 2021, the Company completed the exchange of the Baltic Cove and Baltic Fox, respectively, both 2010-built Handysize vessels. Additionally, on February 15, 2021, February 21, 2021 and February 24, 2021, the Company completed the exchange of the Genco Spirit, the Genco Avra and the Genco Mare, respectively, all 2011-built Handysize vessels. These vessels were exchanged pursuant to an agreement entered into by the Company on December 17, 2020 whereby the Company is to acquire three Ultramax vessels in exchange for six Handysize vessels. Refer also to Note 4 — Vessel Acquisitions and Dispositions.

On January 25, 2021, the Company entered into an agreement to sell the Baltic Leopard, a 2009-built Supramax vessel, to a third party for $8,000 less a 2.0% commission payable to a third party. The sale of the vessel is expected to be completed during the second quarter of 2021. Refer to Note 2 — Summary of Significant Accounting Policies regarding the impairment recorded for this vessel during the year ended December 31, 2020.

On January 22, 2021, the Company entered into an agreement to sell the Genco Lorraine, a 2009-built Supramax vessel, to a third party for $7,950 less a 2.5% commission payable to a third party. The sale of the vessel is expected to be completed during the second quarter of 2021. Refer to Note 2 — Summary of Significant Accounting Policies regarding the impairment recorded for this vessel during the year ended December 31, 2020.

On January 4, 2021, the Company completed the sale of the Baltic Panther, a 2009-built Supramax vessel, to a third party for $7,510 less a 3.0% commission payable to a third party. Additionally, on January 15, 2021, the Company completed the sale of the Baltic Hare, a 2009-built Handysize vessel, to a third party for $7,750 less a 2.0% commission payable to a third party. Lastly, on February 24, 2021, the Company completed the sale of the Baltic Cougar, a 2009-built Supramax vessel, to a third party for $7,600 less a 3.0% commission payable to a third party. The vessel assets for the Baltic Panther, Baltic Hare and Baltic Cougar have been classified as held for sale in the Consolidated Balance as of December 31, 2020 at their estimated net realizable value. Refer also to Note 4 — Vessel Acquisitions and Dispositions. The Company expects to record additional losses on the sale of these vessels of approximately $500 to $700 during the first quarter of 2021, primarily related to the impact of bunkers and lube oil on board and other incidental costs.

These vessels served as collateral under the $495 Million Credit Facility, therefore, $4,515, $4,806 and $4,515 of the net proceeds received from the sale of the Baltic Panther, the Baltic Hare and the Baltic Cougar, respectively, will remain classified as restricted cash for 360 days following the sale date. That amount can be used towards the financing of replacement vessels or vessels meeting certain requirements and added as collateral under the facility. If such a replacement vessel is not added as collateral within such 360 day period, the Company will be required to use the proceeds as a loan prepayment. Additionally, on February 18, 2021, the Company made a $3,471 loan prepayment for the Genco Charger in accordance with these terms under the $495 Million Credit Facility.  

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ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and President and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Report. Based upon that evaluation, our Chief Executive Officer and President and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2020.

INTERNAL CONTROL OVER FINANCIAL REPORTING

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining effective internal control over financial reporting.  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that:

	●	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;	

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and	

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.	

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).  Based on our assessment and those criteria, our management believes that we maintained effective internal control over financial reporting as of December 31, 2020.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on the Company’s internal control over financial reporting. The attestation report is included on page 68 - 69 of this report.

CHANGES IN INTERNAL CONTROLS

There have been no changes in our internal controls over financial reporting (as such term defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of
Genco Shipping & Trading Limited
 
Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Genco Shipping & Trading Limited and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 24, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP	

New York, New York	
February 24, 2021	

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our directors and executive officers is incorporated by reference to the text under the headings “Election of Directors” and “Management” set forth in our Proxy Statement for our 2021 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2020 (the “2021 Proxy Statement”) Information relating to our Code of Conduct and Ethics and to compliance with Section 16(a) of the 1934 Act is incorporated by reference to the text set forth in the 2021 Proxy Statement under the heading “Corporate Governance”.

We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of the Code of Ethics for Chief Executive and Senior Financial Officers by posting such information on our website, www.gencoshipping.com.

ITEM 11.  EXECUTIVE COMPENSATION

Information regarding compensation of our executive officers is incorporated by reference to the text set forth in the 2021 Proxy Statement under the heading “Executive Compensation.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding the beneficial ownership of shares of our common stock by certain persons is incorporated by reference to the text set forth in the 2021 Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.”

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding certain of our transactions and director independence is incorporated by reference to the text set forth in the 2021 Proxy Statement under the heading “Certain Relationships and Related Transactions” and “Director Independence.”

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding our accountant fees and services is incorporated by reference to the text set forth in the 2021 Proxy Statement under the heading “Ratification of Appointment of Independent Auditors.”

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PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	The following documents are filed as a part of this report:	

1.	The financial statements listed in the “Index to Consolidated Financial Statements”	
		
2.	Exhibits:	
		
	The Exhibit Index attached to this report is incorporated into this Item 15 by reference.	

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EXHIBIT INDEX
			
Exhibit		Document	
			
2.1		Confirmation Order, dated July 2, 2014.(1)	
			
2.2		First Amended Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code.(1)	
			
3.1		Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(4)	
			
3.2		Articles of Amendment to Genco Shipping & Trading Limited Second Amended and Restated Articles of Incorporation, dated July 17, 2015.(5)	
			
3.3		Articles of Amendment to Genco Shipping & Trading Limited Second Amended and Restated Articles of Incorporation, dated April 15, 2016.(6)	
			
3.4		Articles of Amendment to Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited, dated July 7, 2016.(7)	
			
3.5		Articles of Amendment to Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited, dated January 4, 2017.(8)	
			
3.6		Articles of Amendment to Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited dated July 15, 2020.(9)	
			
3.7		Certificate of Designations of Rights, Preferences and Privileges of Series A Preferred Stock of Genco Shipping & Trading Limited, dated as of November 14, 2016.(10)	
			
3.8		Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(4)	
			
3.9		Amendment to Amended and Restated By-Laws, dated June 4, 2018.(11)	
			
4.1		Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(4)	
			
4.2		Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(4)	
			
4.3		Description of Genco Shipping & Trading Limited’s Common Stock.(13)	
			
10.1		Letter Agreement dated September 21, 2007 between Genco Shipping & Trading Limited and John C. Wobensmith.(14)	
			
10.2		Letter Agreement dated June 23, 2014 between Genco Shipping & Trading Limited and John C. Wobensmith.(14)	
			
10.3		Warrant Agreement, dated as of July 9, 2014, between Genco Shipping & Trading Limited and Computershare Inc., as Warrant Agent.(4)	
			
10.4		Letter Agreement dated April 30, 2015 between Genco Shipping & Trading Limited and John C. Wobensmith.(14)	
			
10.5		Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan.(18)	
			
10.6		Form of Director Restricted Stock Unit Agreement dated as of July 13, 2015.(15)	
			
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Exhibit		Document	
10.7		Form of Director Restricted Stock Unit Agreement dated as of July 29, 2015.(15)	
			
10.8		Restricted Stock Grant Agreement dated as of February 17, 2016 between Genco Shipping & Trading Limited and John C. Wobensmith.(16)	
			
10.9		Purchase Agreement, dated as of October 4, 2016, by and among Genco Shipping & Trading Limited and funds or related entities managed by Centerbridge Partners, L.P. or its affiliates.(17)	
			
10.10		Purchase Agreement, dated as of October 4, 2016, by and among Genco Shipping & Trading Limited and funds or related entities managed by Strategic Value Partners, LLC or its affiliates.(17)	
			
10.11		Purchase Agreement, dated as of October 4, 2016, by and among Genco Shipping & Trading Limited and funds managed by affiliates of Apollo Global Management, LLC.(17)	
			
10.12		Purchase Agreement, dated as of October 27, 2016, by and between Genco Shipping & Trading Limited and the parties listed as Investors therein.(17)	
			
10.13		Senior Secured Term Loan Facility, dated November 10, 2016, by and among Genco Shipping & Trading Limited, Nordea Bank Finland plc, New York Branch, as administrative agent, Skandinaviska Enskilda Banken AB (publ), DVB Bank SE, ABN AMRO Capital USA LLC, Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgeschäft, Crédit Industriel et Commercial, BNP Paribas, and Nordea Bank Finland plc, New York Branch, as bookrunners and lead arrangers, in an aggregate principal amount of up to $400,000,000 (the “New $400 Million Facility”)(18)	
			
10.14		Amending and Restating Agreement, dated November 15, 2016, by and among Genco Shipping & Trading Limited, the borrowers and financial institutions listed therein, Genco Holdings Limited, and Hayfin Services LLP, as agent and security agent.(18)	
			
10.15		Registration Rights Agreement, dated November 15, 2016, by and among Genco Shipping & Trading Limited and the parties identified as holders therein.(18)	
			
10.16		Amended and Restated Registration Rights Agreement, dated November 15, 2016, by and among Genco Shipping & Trading Limited and the parties identified as holders therein.(18)	
			
10.17		Letter Agreement dated March 23, 2017 between Genco Shipping & Trading Limited and John C. Wobensmith.(18)	
			
10.18		Letter Agreement dated August 7, 2019 between Genco Shipping & Trading Limited and John C. Wobensmith.(19)	
			
10.19		Restricted Stock Unit Agreement dated March 23, 2017 between Genco Shipping & Trading Limited and John C. Wobensmith.(18)	
			
10.20		Option Grant to John C. Wobensmith dated March 23, 2017.(18)	
			
10.21		Restricted Stock Unit Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and Arthur L. Regan.(20)	
			
10.22		Restricted Stock Unit Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and John C. Wobensmith.(20)	
			
10.23		Restricted Stock Unit Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and Apostolos Zafolias.(20)	
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Exhibit		Document	
			
10.24		Option Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and Arthur L. Regan.(20)	
			
10.25		Option Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and John C. Wobensmith.(20)	
			
10.26		Option Agreement dated February 27, 2018 between Genco Shipping & Trading Limited and Apostolos Zafolias.(20)	
			
10.27		Restricted Stock Unit Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Arthur L. Regan.(21)	
			
10.28		Restricted Stock Unit Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and John C. Wobensmith.(21)	
			
10.29		Restricted Stock Unit Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Apostolos Zafolias.(21)	
			
10.30		Restricted Stock Unit Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Joseph Adamo.(21)	
			
10.31		Option Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Arthur L. Regan.(21)	
			
10.34		Option Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and John C. Wobensmith.(21)	
			
10.35		Option Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Apostolos Zafolias.(21)	
			
10.36		Option Agreement dated March 4, 2019 between Genco Shipping & Trading Limited and Joseph Adamo.(21)	
			
10.37		Up to US$460,000,000 Senior Secured Credit Agreement dated May 31, 2018, by and among Genco Shipping & Trading Limited as Borrower, the lenders party thereto from time to time, Nordea Bank AB (publ), New York Branch, Skandinaviska Enskilda Banken AB (publ), ABN AMRO Capital USA LLC, DVB Bank SE, Crédit Agricole Corporate & Investment Bank, and Danish Ship Finance A/S, as Bookrunners and as Mandated Lead Arrangers, and Nordea Bank AB (publ), New York Branch as Administrative Agent (the “$460 Million Credit Agreement”).(11)	
			
10.38		Form of Director Restricted Stock Unit Agreement dated as of May 15, 2019.(13)	
			
10.39		Amendment to Restricted Stock Unit Agreements Pursuant to the Genco Shipping & Trading Limited 2015 Equity Incentive Plan.(13)	
			
10.40		Up to US$108,000,000 Senior Secured Credit Agreement dated August 14, 2018, by and among Genco Shipping & Trading Limited as Borrower, the lenders party thereto from time to time, Crédit Agricole Corporate & Investment Bank, as Structurer and Bookrunner, Crédit Agricole Corporate & Investment Bank and Skandinaviska Enskilda Banken AB (Publ) as Mandated Lead Arrangers and Crédit Agricole Corporate & Investment Bank, as Administrative Agent and as Security Agent. (22)	
			
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Exhibit		Document	
10.41		Amendment and Restatement Agreement dated as of February 28, 2019 by and among Genco Shipping & Trading Limited as Borrower, the Subsidiary Guarantors party thereto, the Delayed Draw Term Loan Lenders party thereto, the other Lenders party thereto, and Nordea Bank ABP, New York Branch, as Mandated Lead Arranger, Bookrunner, Administrative Agent, and Security Agent, pertaining to the $460 Million Credit Agreement.(23)	
			
10.42		Second Amendment to Amended and Restated Credit Agreement, dated as of November 5, 2019, by and among Genco Shipping & Trading Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Nordea Bank ABP, New York Branch, as Administrative Agent and Security Agent.(24)	
			
10.43		Second Amendment to Amended and Restated Credit Agreement, dated as of November 5, 2019, by and among Genco Shipping & Trading Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Crédit Agricole Corporate And Investment Bank, as Administrative Agent and Security Agent.(24)	
			
10.44		Genco Annual Incentive Plan adopted March 4, 2019.(23)	
			
10.45		Restricted Stock Unit Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Arthur L. Regan.(25)	
			
10.46		Restricted Stock Unit Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and John C. Wobensmith.(25)	
			
10.47		Restricted Stock Unit Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Apostolos Zafolias.(25)	
			
10.48		Restricted Stock Unit Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Joseph Adamo.(25)	
			
10.49		Restricted Stock Unit Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Robert Hughes.(25)	
			
10.50		Option Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Arthur L. Regan.(25)	
			
10.51		Option Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and John C. Wobensmith.(25)	
			
10.52		Option Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Apostolos Zafolias.(25)	
			
10.53		Option Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Joseph Adamo.(25)	
			
10.54		Option Agreement dated February 25, 2020 between Genco Shipping & Trading Limited and Robert Hughes.(25)	
			
10.55		Letter Amendment dated as of April 29, 2020 by and among Genco Shipping & Trading Limited as Borrower, Nordea Bank ABP, New York Branch, as Administrative Agent, and Security Agent, and the Lenders party thereto, pertaining to the $495 Million Credit Facility.(26)	
			
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Exhibit		Document	
10.56		Letter Amendment dated as of April 29, 2020 by and among Genco Shipping & Trading Limited as Borrower, Credit Agricole Corporate and Investment Bank, as Administrative Agent and Security Agent, and the Lenders party thereto, pertaining to the $133 Million Credit Facility.(26)	
			
10.57		Fourth Amendment to Amended and Restated Credit Agreement dated as of June 5, 2020 by and among Genco Shipping & Trading Limited as Borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Nordea Bank ABP, New York Branch, as Administrative Agent and Security Agent, pertaining to the $495 Million Credit Facility.(26)	
			
10.58		Amendment and Restatement Agreement dated as of June 11, 2020 by and among Genco Shipping & Trading Limited as Borrower, the Subsidiary Guarantors party thereto, the Revolving Lenders and other lenders party thereto, and Crédit Agricole Corporate & Investment Bank, as Administrative Agent and as Security Agent, pertaining to the $133 Million Credit Facility.(27)	
			
10.59		Fifth Amendment to Amended and Restated Credit Agreement dated as of December 17, 2020 by and among Genco Shipping & Trading Limited as Borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Nordea Bank ABP, New York Branch, as Administrative Agent and Security Agent, pertaining to the $495 Million Credit Facility.(*)	
			
10.60		Letter Amendment to Amended and Restated Credit Agreement dated as of January 18, 2021 by and among Genco Shipping & Trading Limited as Borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Nordea Bank ABP, New York Branch, as Administrative Agent and Security Agent, pertaining to the $495 Million Credit Facility.(*)	
			
10.61		Form of Director Restricted Stock Unit Agreement dated as of July 15, 2020 (26)	
			
21.1		Subsidiaries of Genco Shipping & Trading Limited.(*)	
			
23.1		Consent of Independent Registered Public Accounting Firm.(*)	
			
31.1		Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.(*)	
			
31.2		Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.(*)	
			
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.(*)	
			
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.(*)	
			
101		The following materials from Genco Shipping & Trading Limited’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2020 and 2019, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.(*)	
			
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	

(*)   Filed herewith.

(1)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 7, 2014.	
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(2)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	

(3)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 10, 2015.	

(4)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	

(5)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 17, 2015.	

(6)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 15, 2016.	

(7)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 7, 2016.	

(8)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on January 4, 2017.	

(9)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2020.	

(10)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on November 15, 2016.	

(11)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 5, 2018.	

(12)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on January 11, 2021.	

(13)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-K, filed with the Securities and Exchange Commission on February 27, 2020.	

(14)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 4, 2015.	

(15)	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, filed with the Securities and Exchange Commission on November 13, 2015.	

(16)	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, filed with the Securities and Exchange Commission on May 10, 2016.	

(17)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on November 4, 2016.	

(18)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2017.	

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(19)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on August 9, 2019.	

(20)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q filed with the Securities and Exchange Commission on May 9, 2018.	

(21)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on May 9, 2019.	

(22)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K filed with the Securities and Exchange Commission on August 15, 2018.	

(23)	Incorporated by reference to Genco Shipping & Trading Limited’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 5, 2019.	

(24)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on November 7, 2019.	

(25)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on May 6, 2020.	

(26)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on August 5, 2020.	

(27)	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 12, 2020.	

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 24, 2021.

	GENCO SHIPPING & TRADING LIMITED	
				
	By:	/s/ John C. Wobensmith	
		Name:	John C. Wobensmith	
		Title:	Chief Executive Officer and President (Principal Executive Officer)	

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacity and on February 24, 2021.

SIGNATURE		TITLE	
			
/s/ John C. Wobensmith		CHIEF EXECUTIVE OFFICER AND PRESIDENT	
John C. Wobensmith		(PRINCIPAL EXECUTIVE OFFICER)	
			
/s/ Apostolos Zafolias		CHIEF FINANCIAL OFFICER	
Apostolos Zafolias		(PRINCIPAL FINANCIAL OFFICER)	
			
/s/ Joseph Adamo		CHIEF ACCOUNTING OFFICER	
Joseph Adamo		(PRINCIPAL ACCOUNTING OFFICER)	
			
/s/ Arthur L. Regan		CHAIRMAN OF THE BOARD AND DIRECTOR	
Arthur L. Regan			
			
/s/ James G. Dolphin		DIRECTOR	
James G. Dolphin			
			
/s/ Kathleen C. Haines		DIRECTOR	
Kathleen C. Haines			
			
/s/ Kevin Mahony		DIRECTOR	
Kevin Mahony			
			
/s/ Basil G. Mavroleon		DIRECTOR	
Basil G. Mavroleon			
			
/s/ Jason Scheir		DIRECTOR	
Jason Scheir			
			
/s/ Bao D. Truong		DIRECTOR	
Bao D. Truong			

78

Exhibit 10.59

EXECUTION VERSION

FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Fifth Amendment”), dated as of December 17, 2020, by and among Genco Shipping & Trading Limited, a company incorporated under the laws of the Republic of the Marshall Islands (the “Borrower”), the Subsidiary Guarantors party hereto, the Lenders party hereto and Nordea Bank ABP, New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”) and Security Agent (in such capacity, the “Security Agent”).
PRELIMINARY STATEMENTS
WHEREAS, the Borrower, the Administrative Agent, the Security Agent and the Lenders party thereto are party to that certain Amended and Restated Credit Agreement, dated as of February 28, 2019 (as amended pursuant to that certain First Amendment to Amended and Restated Credit Agreement, dated as of June 28, 2019, that certain Second Amendment to Credit Agreement, dated as of November 5, 2019, that certain Letter Amendment to Amended and Restated Credit Agreement, dated as of April 29, 2020, that certain Fourth Amendment to Amended and Restated Credit Agreement, dated as of June 5, 2020 and as further amended, restated, supplemented and/or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”).
WHEREAS, the Borrower has requested, and the Lenders have agreed, to (i) amend the Credit Agreement in the form attached as Annex A hereto (the Credit Agreement, as so amended, the “Amended Credit Agreement”) and (ii) amend and restate Schedule VI to the Credit Agreement in the form attached as Annex B hereto, in each case, as provided in Section 3 hereof upon the terms and subject to the satisfaction of the conditions set forth herein and effective as of the Fifth Amendment Effective Date (as defined below).
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and receipt of all of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.  Definitions.  Capitalized terms not otherwise defined in this Fifth Amendment have the same meanings as specified in the Amended Credit Agreement.
SECTION 2.  Amendments to Credit Agreement.  Effective as of the Fifth Amendment Effective Date (as defined below), (i) the Credit Agreement is hereby amended to delete the red or green stricken text (indicated textually in the same manner as the following examples:  stricken text and stricken text) and to add the blue or green double-underlined text (indicated textually in the same manner as the following examples:  double-underlined text and double-underlined text) as set forth on the pages of the Amended Credit Agreement attached as Annex A hereto and (ii) Schedule VI to Credit Agreement is hereby amended and restated in its entirety in the form attached as Annex B hereto.
SECTION 3.  Conditions to Effectiveness of this Fifth Amendment.  This Fifth Amendment shall become effective on the date when the following conditions shall have been satisfied (the “Fifth Amendment Effective Date”):
(a)The Administrative Agent shall have received this Fifth Amendment, executed and delivered by the Borrower, the Subsidiary Guarantors, the Administrative Agent, Security Agent and Lenders constituting Required Lenders.

(b)The Borrower shall have delivered to the Administrative Agent Appraisals from two Approved Appraisers for each Collateral Vessel and each New Exchange Vessel dated no more than thirty (30) days prior to the Fifth Amendment Effective Date stating the then current Appraised Value of each Collateral Vessel and each New Exchange Vessel, in each case, in form and substance reasonably acceptable to the Administrative Agent.
(c)The Administrative Agent shall have received, on behalf of itself and the Lenders, the following legal opinions with respect to this Fifth Amendment:
(i)special New York counsel to the Borrower and the Obligors (which shall be Kramer Levin Naftalis & Frankel LLP or another New York law firm reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Fifth Amendment Effective Date, and
(ii)special Republic of the Marshall Islands counsel to each of the Obligors (which shall be Reeder & Simpson, P.C. or another law firm qualified to render an opinion as to the Republic of the Marshall Islands law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Fifth Amendment Effective Date,
in each case which shall be in form and substance reasonably acceptable to the Lenders.
(d)Payment of all fees and all other reasonable fees and documented out-of-pocket costs and expenses (including, without limitation, the reasonable legal fees and expenses of White & Case LLP) and other compensation due and payable on or prior to the Fifth Amendment Effective Date, in each case, payable to the Administrative Agent, the Security Agent and the Lenders in respect of the transactions contemplated by this Fifth Amendment to the extent reasonably invoiced at least one (1) Business Day prior to the Fifth Amendment Effective Date.
(e)Before and after giving effect to the Fifth Amendment, all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).
(f)No Default or Event of Default shall have occurred and be continuing.
SECTION 4.  Representations and Warranties.  In order to induce the Lenders to enter into this Fifth Amendment, the Borrower hereby represents and warrants that (i) no Default or Event of Default exists as of the Fourth Amendment Effective Date (as defined below) after giving effect to this Fifth Amendment and (ii) all of the representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on the Fifth Amendment Effective Date after giving effect to this Fifth Amendment, with the same effect as though such representations and warranties had been made on and as of the Fifth Amendment Effective Date (it being understood that any representation or warranty that by its terms is made as of a specific date shall be true and correct in all material respects as of such specific date).
SECTION 5.  Effect of Amendment.
(a)The Borrower acknowledges that on the date hereof all outstanding Secured Obligations are payable in accordance with their terms (except as limited by applicable bankruptcy,

insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity, regardless of whether considered in a proceeding in equity or at law).  The Borrower, the Administrative Agent, and each other party hereto does hereby adopt, ratify, and confirm the Credit Agreement, and acknowledges and agrees that the Credit Agreement, is and remains in full force and effect, and the Borrower acknowledges and agrees that its liabilities and obligations under the Credit Agreement and the other Credit Documents it is a party to are not impaired in any respect by this Fifth Amendment.
(b)This Fifth Amendment is a Credit Document for the purposes of the provisions of the other Credit Documents. On and after the Fifth Amendment Effective Date, each reference in the Credit Agreement and each other Credit Document to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement shall mean and be a reference to this Credit Agreement, as modified hereby.
(c)This Fifth Amendment is limited precisely as written and shall not be deemed to (i) be a waiver of or a consent to the modification of or deviation from any other term or condition of the Credit Agreement and the other Credit Documents or any of the other instruments or agreements referred to therein except as set forth herein or (ii) prejudice any right or rights which any of the Lenders or the Administrative Agent now have or may have in the future under or in connection with the Credit Agreement, as amended hereby, the other Credit Documents or any of the other instruments or agreements referred to therein. The Administrative Agent, the Security Agent and the Lenders expressly reserve all their rights and remedies except as expressly set forth in this Fifth Amendment.
SECTION 6.  Obligor Reaffirmation and Consent.
(d)Each Obligor party hereto hereby consents to the terms and conditions of this Fifth Amendment.
(e)Each Obligor hereby acknowledges and agrees that, after giving effect to the Fifth Amendment Effective Date, all of its respective obligations and liabilities under the Credit Documents to which it is a party, as such obligations and liabilities have been amended by this Fifth Amendment, are reaffirmed, and remain in full force and effect.
(f)After giving effect to this Fifth Amendment, each Obligor reaffirms each Lien granted by it to the Security Agent for the benefit of the Secured Creditors under each of the Security Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Amended Credit Agreement and shall continue to secure the Secured Obligations (after giving effect to this Fifth Amendment), in each case, on and subject to the terms and conditions set forth in the Amended Credit Agreement and the other Credit Documents.
SECTION 7.  Execution in Counterparts; Severability; Electronic Signatures.  This Fifth Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original (including if delivered by e-mail or facsimile transmission), but all of which shall together constitute one and the same instrument. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  The words “execution,” “signed,” “signature,” and words of like import in this Fifth Amendment shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar applicable state laws based on the Uniform Electronic Transactions

Act. A set of counterparts executed by all the parties hereto shall be lodged with each of the Borrower and the Administrative Agent.
SECTION 8.  Successors.  This Fifth Amendment shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto.
SECTION 9.  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.  THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  Section 11.09 of the Amended Credit Agreement is incorporated herein by reference, mutatis mutandis.
[The remainder of this page is intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

	GENCO SHIPPING & TRADING LIMITED, as the Borrower	

	By:	/s/ Apostolos Zafolias	
		Name:	Apostolos Zafolias	
		Title:	Chief Financial Officer	

[Signature page to Genco Fifth Amendment]

				
	GENCO RAPTOR LLC,	
	GENCO THUNDER LLC,	
	GENCO CAVALIER LLC,	
	each as a Subsidiary Guarantor	

	By:	/s/ Apostolos Zafolias	
		Name:	Apostolos Zafolias	
		Title:	Manager and Chief Financial Officer	

	BALTIC TRADING LIMITED,	
	GENCO HOLDINGS LIMITED,	
	each as a Subsidiary Guarantor	

	By:	/s/ Apostolos Zafolias	
		Name:	Apostolos Zafolias	
		Title:	Chief Financial Officer	

	GENCO INVESTMENTS LLC,	

	By:	Genco Shipping & Trading Limited, its Sole Member, as a Subsidiary Guarantor	

	By:	/s/ Apostolos Zafolias	
		Name:	Apostolos Zafolias	
		Title:	Chief Financial Officer and Executive Vice President, Finance	

[Signature page to Genco Fifth Amendment]

				
BALTIC BEAR LIMITED
BALTIC BREEZE LIMITED
BALTIC COUGAR LIMITED
BALTIC COVE LIMITED
BALTIC FOX LIMITED
BALTIC HARE LIMITED
BALTIC HORNET LIMITED
BALTIC JAGUAR LIMITED
BALTIC LEOPARD LIMITED
BALTIC LION LIMITED
BALTIC MANTIS LIMITED
BALTIC PANTHER LIMITED
BALTIC SCORPION LIMITED
BALTIC TIGER LIMITED
BALTIC WASP LIMITED
BALTIC WIND LIMITED
BALTIC WOLF LIMITED
GENCO AQUITAINE LIMITED
GENCO ARDENNES LIMITED
GENCO AUGUSTUS LIMITED
GENCO AUVERGNE LIMITED
GENCO AVRA LIMITED
GENCO BAY LIMITED
GENCO BOURGOGNE LIMITED
GENCO BRITTANY LIMITED
	GENCO CHAMPION LIMITED
GENCO CHARGER LIMITED
GENCO CLAUDIUS LIMITED
GENCO COMMODUS LIMITED
GENCO CONSTANTINE LIMITED
GENCO HADRIAN LIMITED
GENCO HUNTER LIMITED
GENCO LANGUEDOC LIMITED
GENCO LOIRE LIMITED
GENCO LONDON LIMITED
GENCO LORRAINE LIMITED
GENCO MARE LIMITED
GENCO MAXIMUS LIMITED
GENCO NORMANDY LIMITED
GENCO OCEAN LIMITED
GENCO PICARDY LIMITED
GENCO PREDATOR LIMITED
GENCO PROVENCE LIMITED
GENCO PYRENEES LIMITED
GENCO RHONE LIMITED
GENCO SPIRIT LIMITED
GENCO TIBERIUS LIMITED
GENCO TITUS LIMITED
GENCO WARRIOR LIMITED

each as a Subsidiary Guarantor	
		
	By:	/s/ Apostolos Zafolias	
		Name:	Apostolos Zafolias	
		Title:	Director and Vice President	

[Signature page to Genco Fifth Amendment]

				
	NORDEA BANK ABP, NEW YORK BRANCH, individually, as Administrative Agent, Security Agent and a Lender	

	By:	/s/ Oddbjørn Warpe	
		Name:	Oddbjørn Warpe	
		Title:	Executive Director	

	By:	/s/ Martin Lunder	
		Name:	Martin Lunder	
		Title:	Managing Director	

[Signature page to Genco Fifth Amendment]

				
	SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), as a Lender	

	By:	/s/ Arne Juell-Skielse	
		Name:	Arne Juell-Skielse	
		Title:		

	By:	/s/ Ulrika Flygar	
		Name:	Ulrika Flygar	
		Title:		

[Signature page to Genco Fifth Amendment]

				
	ABN AMRO CAPITAL USA LLC, as a Lender	

	By:	/s/ Maria Fahey	
		Name:	Maria Fahey	
		Title:	Director	

	By:	/s/ Amit Wynalda	
		Name:	Amit Wynalda	
		Title:	Executive Director	

[Signature page to Genco Fifth Amendment]

				
	DVB BANK SE, as a Lender	

	By:	/s/ Einar C. Grüner-Hegge	
		Name:	Einar C. Grüner-Hegge	
		Title:	Senior Vice President	

	By:	/s/ Natacha Bloem	
		Name:	Natacha Bloem	
		Title:	Senior Vice President	

[Signature page to Genco Fifth Amendment]

				
	CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender	

	By:	/s/ Georgios Gkanasoulis	
		Name:	Georgios Gkanasoulis	
		Title:	Director	

	By:	/s/ Alexander Foley	
		Name:	Alexander Foley	
		Title:	Senior Associate	

[Signature page to Genco Fifth Amendment]

				
	DEUTSCHE BANK AG FILIALE	
	DEUTSCHLANDGESCHÄFT, as a Lender	

	By:	/s/ Bastian Duehmert	
		Name:		
		Title:		

	By:	/s/ Tilman Stein	
		Name:	Tilman Stein	
		Title:	Director / Senior Counsel	

[Signature page to Genco Fifth Amendment]

				
	DANISH SHIP FINANCE A/S, as a Lender	

	By:	/s/ Erik I. Lassen	
		Name:	Erik I. Lassen	
		Title:	CEO	

	By:	/s/ Maria Stubkjær Nordstrand	
		Name:	Maria Stubkjær Nordstrand	
		Title:	Senior Loan Manager	

[Signature page to Genco Fifth Amendment]

				
	CTBC BANK CO. LTD., as a Lender	

	By:	/s/ Ting Chen	
		Name:	Ting Chen	
		Title:	Senior Vice President	

	By:		
		Name:		
		Title:		

[Signature page to Genco Fifth Amendment]

ANNEX A
AMENDED CREDIT AGREEMENT
[SEE ATTACHED]

[Conformed through the First Amendment to Amended and Restated Credit Agreement, dated June 28, 2019, the Second Amendment to Amended and Restated Credit Agreement, dated November 5, 2019, the Letter Amendment dated April 29, 2020 and, the Fourth Amendment to Amended and Restated Credit Agreement, dated June 5, 2020, and the Fifth Amendment to the Amended and Restated Credit Agreement, dated December 17, 2020]

$495,000,000 AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
among
GENCO SHIPPING & TRADING LIMITED
as Borrower,
VARIOUS LENDERS
and
NORDEA BANK ABP, NEW YORK BRANCH,
as Administrative Agent and as Security Agent
________________________________
Dated as of May 31, 2018
as Amended and Restated as of February 28, 2019
_____________________________
NORDEA BANK ABP, NEW YORK BRANCH, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), ABN AMRO CAPITAL USA LLC, DVB BANK SE, CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK AND DANISH SHIP FINANCE A/S,
as Bookrunners and as Mandated Lead Arrangers

			
	TABLE OF CONTENTS		
		Page	
SECTION 1	Definitions and Accounting Terms	1	
1.01	Defined Terms	1	
1.02	Other Definitional Provisions	3132	
1.03	Rounding	3233	
			
SECTION 2	Amount and Terms of Credit Facilities	3233	
2.01	The Commitments	3233	
2.02	Notice of Borrowing	3233	
2.03	Disbursement of Funds	3334	
2.04	Notes	3435	
2.05	Pro Rata Borrowings	3435	
2.06	Interest	3536	
2.07	Interest Periods	3536	
2.08	Increased Costs, Illegality, Market Disruption, etc	3637	
2.09	Compensation	3839	
2.10	Change of Lending Office; Limitation on Additional Amounts	3839	
2.11	Replacement of Lenders	3940	
			
SECTION 3	Commitment Commission; Fees; Reductions of Commitment	3940	
3.01	Commitment Commission; Fees	3940	
3.02	Voluntary Reduction of Commitments	4041	
3.03	Mandatory Reduction of Commitments	4041	
			
SECTION 4	Prepayments; Payments; Taxes	4041	
4.01	Voluntary Prepayments	4041	
4.02	Mandatory Repayments	4142	
4.03	Method and Place of Payment	4445	
4.04	Net Payments; Taxes	4445	
4.05	Application of Proceeds	4748	
			
SECTION 5	Conditions Precedent	4849	
5.01	Original Closing Date	4849	
5.02	Conditions to the Initial Borrowing Date	4950	
5.03	Conditions to Delayed Draw Term Loans	5152	
			
SECTION 6	Representations and Warranties	5253	
6.01	Corporate/Limited Liability Company/Limited Partnership Status	5253	
6.02	Corporate Power and Authority	5253	
6.03	Title; Maintenance of Properties	5253	
6.04	Legal Validity and Enforceability	5254	
6.05	No Violation	5354	
6.06	Governmental Approvals	5354	
6.07	Balance Sheets; Financial Condition; Undisclosed Liabilities	5455	
6.08	Litigation	5455	
6.09	True and Complete Disclosure	5456	
6.10	Use of Proceeds; Margin Regulations	5556	
6.11	Taxes; Tax Returns and Payments	5657	
6.12	Compliance with ERISA	5657	
6.13	Security Documents	5859	
6.14	Representations and Warranties in Documents	5859	
6.15	Subsidiaries	5859	
6.16	Compliance with Statutes, etc.	5859	

	
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	TABLE OF CONTENTS
(continued)		
		Page	
6.17	Investment Company Act	5859	
6.18	Pollution and Other Regulations	5859	
6.19	Labor Relations	5960	
6.20	Patents, Licenses, Franchises and Formulas	5960	
6.21	Financial Indebtedness	5960	
6.22	Insurance	6061	
6.23	Concerning the Collateral Vessels	6061	
6.24	Citizenship	6061	
6.25	Vessel Classification; Flag	6061	
6.26	Anti-Money Laundering and Sanctions Laws	6061	
6.27	No Immunity	6162	
6.28	Fees and Enforcement	6162	
6.29	Form of Documentation	6162	
6.30	No Material Adverse Effect	6162	
6.31	Pari Passu or Priority Status	6162	
6.32	Solvency; Winding-up, etc	6162	
6.33	Completeness of Documentation	6263	
			
SECTION 7	Affirmative Covenants	6263	
7.01	Information Covenants	6263	
7.02	Books, Records and Inspections	6667	
7.03	Maintenance of Property; Insurance Mortgagee Interest Insurance	6667	
7.04	Corporate Franchises	6667	
7.05	Compliance with Statutes, etc	6667	
7.06	Compliance with Environmental Laws	6768	
7.07	ERISA	6768	
7.08	End of Fiscal Years; Fiscal Quarters	6869	
7.09	Performance of Obligations	6869	
7.10	Payment of Taxes	6869	
7.11	Further Assurances	6970	
7.12	Deposit of Earnings	6970	
7.13	Ownership of Subsidiaries and Collateral Vessels	7071	
7.14	Citizenship; Flag of Collateral Vessel; Collateral Vessel Classifications; Operation of Collateral Vessels	7071	
7.15	Use of Proceeds	7172	
7.16	Charter Contracts	7172	
7.17	Technical Management Agreements	7273	
7.18	Separate Existence	7273	
7.19	Sanctions	7374	
7.20	Maintenance of Listing	7374	
7.21	Specified Exchange Transactions	74	
			
SECTION 8	Negative Covenants	7375	
8.01	Liens	7375	
8.02	Consolidation, Merger, Sale of Assets, etc.	7577	
8.03	Dividends	7678	
8.04	Indebtedness	7779	
8.05	Advances, Investments, Loans and Vessel Acquisitions	7880	
8.06	Transactions with Affiliates	7880	
8.07	Financial Covenants	7981	
8.08	Limitation on Modifications of Certain Documents; etc	7982	

	
(ii)	

			
	TABLE OF CONTENTS
(continued)		
		Page	
8.09	Limitation on Certain Restrictions on Subsidiaries	8082	
8.10	Limitation on Issuance of Capital Stock	8082	
8.11	Business	8082	
8.12	Manager	8183	
8.13	Bank Accounts	8183	
8.14	Jurisdiction of Employment	8183	
8.15	Operation of Collateral Vessels	8183	
8.16	Corrupt Practices	8183	
8.17	No Investments	8183	
8.18	[Reserved]	8183	
8.19	Hedging Agreements	8184	
			
SECTION 9	Events of Default	8284	
9.01	Payments	8284	
9.02	Representations, etc	8284	
9.03	Covenants	8284	
9.04	Default Under Other Agreements	8284	
9.05	Bankruptcy, etc	8285	
9.06	ERISA	8385	
9.07	Security Documents	8486	
9.08	Guaranty	8486	
9.09	Judgments	8486	
9.10	Termination of Business	8486	
9.11	Authorizations and Consents	8486	
9.12	Arrest; Expropriation	8487	
9.13	Failure to Comply with Final Judgment	8587	
9.14	[Reserved]	8587	
9.15	Change of Control	8587	
			
SECTION 10	Agency and Security Trustee Provisions	8587	
10.01	Appointment	8587	
10.02	Nature of Duties	8688	
10.03	Lack of Reliance on the Agents	8688	
10.04	Certain Rights of the Agents	8689	
10.05	Reliance	8789	
10.06	Indemnification	8789	
10.07	The Administrative Agent in its Individual Capacity	8789	
10.08	Holders	8789	
10.09	Resignation by the Administrative Agent	8790	
10.10	Collateral Matters	8890	
10.11	Certain ERISA Matters	9092	
10.12	Delivery of Information	9092	
			
SECTION 11	Miscellaneous	9092	
11.01	Payment of Expenses, etc	9092	
11.02	Right of Setoff	9294	
11.03	Notices	9294	
11.04	Benefit of Agreement; Assignments; Participations	9295	
11.05	No Waiver; Remedies Cumulative	9597	
11.06	Payments Pro Rata	9597	
11.07	Calculations; Computations	9698	

	
(iii)	

			
	TABLE OF CONTENTS
(continued)		
		Page	
11.08	Agreement Binding	9698	
11.09	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	9698	
11.10	Counterparts	9799	
11.11	[Reserved]	9799	
11.12	Headings Descriptive	97100	
11.13	Amendment or Waiver; etc	97100	
11.14	Survival	99101	
11.15	Domicile of the Loan	99101	
11.16	Confidentiality	99102	
11.17	Register	100102	
11.18	Judgment Currency	101103	
11.19	Language	101103	
11.20	Waiver of Immunity	101103	
11.21	USA PATRIOT Act Notice	101104	
11.22	Severability	102104	
11.23	Flag Jurisdiction Transfer	102104	
11.24	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	102104	
11.25	German Resident Secured Creditor.	103105	
11.26	Amendment and Restatement	103105	

	
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[Different first page link-to-previous setting changed from off in original to on in modified.].

TABLE OF CONTENTS

				Page	
				
SCHEDULE I-A	-	    	Initial Term Loan Commitments	
SCHEDULE I-B	-		Delayed Draw Term Loan Commitments	
SCHEDULE II	-		Lender Addresses	
SCHEDULE III	-		Subsidiaries	
SCHEDULE IV-A	-		Required Insurance	
SCHEDULE IV-B	-		Collateral Vessel Insurance	
SCHEDULE V	-		ERISA	
SCHEDULE VI	-		Collateral Vessels	
SCHEDULE VII	-		Notice Addresses	
SCHEDULE VIII	-		Financial Indebtedness	
SCHEDULE IX	-		Disqualified Lenders	
SCHEDULE X-1	-		Scheduled Repayments – Initial Term Loans	
SCHEDULE X-2	-		Scheduled Repayments – Delayed Draw Term Loans	
				
EXHIBIT A	-		Form of Notice of Borrowing	
EXHIBIT B-1	-		Form of Term Note	
EXHIBIT B-2	-		Form of Delayed Draw Term Note	
EXHIBIT C	-		Form of Guaranty	
EXHIBIT D-1	-		Form of Marshall Islands Collateral Vessel Mortgage	
EXHIBIT D-2	-		Form of Liberian Collateral Vessel Mortgage	
EXHIBIT D-3	-		Form of Hong Kong Collateral Vessel Mortgage	
EXHIBIT E	-		Form of Pledge Agreement	
EXHIBIT F	-		Form of Assignment of Insurances	
EXHIBIT G	-		Form of Assignment of Earnings	
EXHIBIT H	-		Form of Assignment of Charter	
EXHIBIT I-1	-		Form of Compliance Certificate	
EXHIBIT I-2	-		Form of Collateral Maintenance Ratio Certificate	
EXHIBIT J	-		Form of Subordination Provisions	
EXHIBIT K	-		Form of Assignment and Assumption Agreement	
EXHIBIT L	-		Form of Solvency Certificate	

[Different first page link-to-previous setting changed from off in original to on in modified.].
(i)

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 28, 2019, among GENCO SHIPPING & TRADING LIMITED, a company incorporated under the laws of the Republic of the Marshall Islands (the “Borrower”), the Lenders party hereto from time to time, NORDEA BANK ABP, NEW YORK BRANCH (“Nordea”), SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), ABN AMRO CAPITAL USA LLC, DVB BANK SE, CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK AND DANISH SHIP FINANCE A/S, as Bookrunners and as Mandated Lead Arrangers (in such capacity, the “Lead Arrangers”) and Nordea, as Administrative Agent (in such capacity, the “Administrative Agent”) and as Security Agent under the Security Documents (in such capacity, the “Security Agent”).  All capitalized terms used herein and defined in Section 1.01 are used herein as therein defined.
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent, the Security Agent and the Lenders party thereto are party to that certain Credit Agreement, dated as of May 31, 2018 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time prior to the date hereof, the “Original Credit Agreement”), pursuant to which the Lenders party thereto made loans and commitments to the Borrower as provided therein;
WHEREAS, pursuant to that certain Amendment and Restatement Agreement, dated as of the date hereof (the “Restatement Agreement”), by and among the Borrower, the Administrative Agent, the Security Agent and the Lenders party thereto, the Administrative Agent and the Lenders have agreed, inter alia, to amend and restate the Original Credit Agreement in its entirety to read as set forth in this Agreement as of the Restatement Effective Date; and
WHEREAS, subject to and upon the terms and conditions set forth in the Restatement Agreement, the parties hereto have agreed to amend and restate the Original Credit Agreement as provided herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1Definitions and Accounting Terms.
1.01Defined Terms.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Acceptable Classification Society” shall mean American Bureau of Shipping, Nippon Kaiji Kyokai, Lloyd’s Register of Shipping, Bureau Veritas and DNV GL, or such other first class vessel classification society that is a member of the International Association of Classification Societies that the Required Lenders may approve from time to time.
“Acceptable Flag Jurisdiction” shall mean the Republic of the Marshall Islands, Liberia, Hong Kong, Panama, the Bahamas or such other flag jurisdiction as may be acceptable to all Lenders.
“Additional Collateral” shall mean additional collateral satisfactory to the Required Lenders granted in favor of the Security Agent to cure non-compliance with Section 8.07(d) (it being understood that cash collateral comprised of Dollars (which shall be valued at par) and any dry bulk vessel not more than ten (10) years of age and otherwise meeting the requirements of a Replacement Vessel shall each be deemed satisfactory to the Required Lenders), pursuant to security documentation in form and substance reasonably satisfactory to the Security Agent; provided such Additional Collateral is in an aggregate amount at least sufficient to cure such non-compliance.

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“Additional Collateral Release Conditions” shall mean, with respect to the release of any Additional Collateral, the following:
(a)before and after giving effect to such release, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Borrower shall be, and shall have been at all times during the most recently ended full fiscal quarter, in compliance with Section 8.07(d);
(b)the Borrower shall have delivered to the Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent and the Security Agent, (i) an officer’s certificate certifying as to matters in clause (a) above, (ii) Appraisals for each Collateral Vessel dated no more than thirty (30) days prior to the delivery thereof in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers stating the then current Appraised Value of each Collateral Vessel and otherwise meeting the requirements set forth in Section 7.01(d) and (iii) any other documents reasonably requested by the Administrative Agent; and
(c)the Borrower shall have paid all costs and expenses of the Administrative Agent and the Security Agent relating to the preparation, execution and delivery of the relevant release documents.
“Additional Vessel” shall have the meaning provided in the definition of “Collateral Vessel”.
“Administrative Agent” shall have the meaning provided in the first paragraph of this Agreement, and shall include any successor thereto.
“Affiliate” shall mean, with respect to any Person, any other Person (including, for purposes of Section 8.06 only, all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided, however, that for purposes of Section 8.06, an Affiliate of the Borrower shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Borrower and any officer or director of the Borrower or any of its Subsidiaries.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.  Notwithstanding anything to the contrary contained above, for purposes of Section 8.06, none of the Administrative Agent, nor the Security Agent, nor any Lead Arranger, nor any Lender (or any of their respective affiliates) shall be deemed to constitute an Affiliate of the Borrower or its Subsidiaries in connection with the Credit Documents or its dealings or arrangements relating thereto.
“Agents” shall mean, collectively, the Administrative Agent and the Security Agent.
“Aggregate Appraised Value” shall mean at any time, the sum of the Appraised Value of all Collateral Vessels owned by the Subsidiary Guarantors at such time which are not then subject to an Event of Loss.
“Agreement” shall mean this Amended and Restated Credit Agreement, as modified, supplemented, amended or restated from time to time.
“Amortization Amount” shall mean (a) with respect to the Initial Term Loans, (i) initially, the amount, paid quarterly, set forth on Schedule X-1 to the Original Credit Agreement as of the Original Closing Date and (ii) following any event or occurrence referred to in Section 4.02(a)(iii), such other amount, paid quarterly, to be set forth on a revised Schedule X-1 as amended, modified, supplemented and/or replaced to reflect such event or occurrence in accordance with the requirements of Section 4.02(a) and (b) with respect to the Delayed Draw Term Loans, (i) initially, the amount, paid

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quarterly, set forth on Schedule X-2 attached in Annex B to the Restatement Agreement and (ii) following any event or occurrence referred to in Section 4.02(a)(iii), such other amount, paid quarterly, to be set forth on a revised Schedule X-2, as amended, modified, supplemented and/or replaced to reflect such event or occurrence in accordance with the requirements of Section 4.02(a), as applicable.
“Anti-Corruption Laws” shall have the meaning provided in Section 6.10(d).
“Applicable Margin” shall mean (a) with respect to Initial Term Loan, (i) from the Original Closing Date until (and including) December 31, 2018, 3.25% per annum and (ii) thereafter, following the delivery of a Quarterly Pricing Certificate, the percentage per annum set forth across from the Total Net Leverage Ratio for the Initial Term Loan in the table below indicated to have been achieved in any such certificate and (b) with respect to Delayed Draw Term Loans, (i) from the Restatement Effective Date until (and including)  September 30, 2019, 2.50% per annum and (ii) thereafter, following the delivery of a Quarterly Pricing Certificate, the percentage per annum set forth across from the Total Net Leverage Ratio for Delayed Draw Term Loans in the table below indicated to have been achieved in any such certificate:

Pricing
Level	Total Net Leverage Ratio	Applicable Margin	
		Initial Term Loan	Delayed Draw
Term Loans	
1	Greater than 5.00 to 1.00	3.50%	2.75%	
2	Greater than or equal to 3.00 to 1.00 and less than or equal to 5.00 to 1.00	3.25%	2.50%	
3	Less than 3.00 to 1.00	3.00%	2.25%	

The Applicable Margin determined in accordance with clause (a)(ii) and (b)(ii) of the first paragraph of this definition shall be in effect from and after each date of delivery (each such date, a “Start Date”) of any certificate (each such certificate, a “Quarterly Pricing Certificate”) by an Authorized Officer of the Borrower to the Administrative Agent, within 45 days of the last day of the first three fiscal quarters of the Borrower and within 90 days of the last day of the fourth fiscal quarter of the Borrower, which certificate shall set forth the calculation of the Total Net Leverage Ratio as at the last day of the fiscal quarter ended immediately prior to the relevant Start Date and the Applicable Margin, which shall be thereafter applicable until the earlier of (x) the date on which the next Quarterly Pricing Certificate is delivered to the Administrative Agent or (y) the date which is 45 days following the last day of the fiscal quarter in which the previous Start Date occurred (such earlier date, the “End Date”). If no certificate has been delivered to the Administrative Agent as of the End Date indicating an entitlement to a new (or the same) Applicable Margin (and thus commencing a new Start Date), the Applicable Margin shall be the one set forth in Pricing Level 1 of the table above (such level, the “Highest Applicable Margin”).  Notwithstanding anything to the contrary contained above in this definition, the Applicable Margin shall be the Highest Applicable Margin at all times during an Event of Default.
“Appraisal” shall mean, with respect to a Collateral Vessel, a written appraisal by an Approved Appraiser in favor of the Administrative Agent of the Appraised Value of such Collateral Vessel.
“Appraised Value” shall mean for any Collateral Vessel at any time, the arithmetic mean of the fair market values of such Collateral Vessel as set forth on the Appraisals of at least two Approved Appraisers most recently delivered to, or obtained by, the Administrative Agent prior to such time pursuant to Section 5.02(d) or Section 7.01(d) and prepared:

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(a)as at a date not more than 30 days prior to such delivery;
(b)by two Approved Appraisers selected by the Borrower;
(c)without physical inspection of the Collateral Vessel, except as required by the Administrative Agent if an Event of Default has occurred and is continuing; and
(d)on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any charter or other contract of employment and with no value to be given to any pooling arrangements; provided that if a range of values is provided in a particular Appraisal, then the Appraised Value in such Appraisal shall be deemed to be the median of such values.
“Approved Appraiser” shall mean Clarkson Platou, Clarkson Valuations Limited, Arrow Sale & Purchase (UK) Limited, Simpson Spence & Young Shipbrokers, Braemar ACM, Fearnleys or Maersk Broker, any Affiliate of the foregoing which actually provides Appraisals for a Vessel or any other appraiser approved by the Required Lenders, for the purposes of providing an Appraisal for a Collateral Vessel.
“Assignment and Assumption Agreement” shall mean an assignment and assumption agreement substantially in the form of Exhibit K (appropriately completed).
“Assignment of Charter” shall mean an assignment of charter substantially in the form of Exhibit H.
“Assignment of Earnings” shall mean an assignment of earnings substantially in the form of Exhibit G.
“Assignment of Insurances” shall mean an assignment of insurances substantially in the form of Exhibit F.
“Authorized Officer” shall mean the chairman of the board, the president, any vice president, the treasurer, the secretary, any assistant secretary, any other financial officer, an authorized manager and any other officer (or a Person or Persons so designated by any officer) of any Obligor.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” shall have the meaning provided in Section 9.05.
“Bankruptcy Proceeding” shall have the meaning provided in Section 10.10(e).
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose

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assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Borrower” shall have the meaning provided in the first paragraph of this Agreement.
“Borrowing” shall mean (i) the borrowing of the Initial Term Loan from all the Lenders (other than any Defaulting Lender) having Initial Term Loan Commitments on a given date having the same Interest Period or (ii) a borrowing of Delayed Draw Term Loans on a Delayed Draw Funding Date from all the Delayed Draw Term Loan Lenders (other than any Defaulting Lender) having Delayed Draw Term Loan Commitments, as applicable, on a given date having the same Interest Period; provided that no Borrowing of Delayed Draw Term Loans shall be in amount less than $5,000,000.
“Borrowing Date” shall mean (i) with respect to the Initial Term Loan, the Initial Borrowing Date and (ii) with respect to a Delayed Draw Term Loan, each Delayed Draw Term Loan Funding Date.
“Business Day” shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in New York City, London, Hamburg, Stockholm, Taiwan and Copenhagen.
“Cash Collateral Account” shall have the meaning provided in the Section 4.02(b)(ii)(1).
“Cash Equivalents” shall mean (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one year from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such Person, and (v) Investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (iv) above.
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time, 42 U.S.C. § 9601 et seq.
“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, if not already enacted as of the Original Closing Date, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” shall mean any of the following:

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(a)if the Borrower ceases to own directly or indirectly, 100% of the Equity Interests in any Subsidiary Guarantor other than as a consequence of the Collateral Disposition of the Collateral Vessel owned by such Subsidiary Guarantor and the prepayment of the Loans pursuant to, and to the extent required by, Section 4.02(b); or
(b)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than any Permitted Holder or any group of Permitted Holders, shall at any time become the ultimate owner, directly or indirectly, beneficially or of record or the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 of the Exchange Act), of Equity Interests representing more than 35% of the outstanding voting or economic Equity Interests of the Borrower or control the appointment of members of the board of directors of the Borrower, unless the new shareholder(s) is/are acceptable to the Lenders; or
(c)the replacement of a majority of the directors on the board of directors of the Borrower over a two-year period from the directors who constituted the board of directors of the Borrower at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of the Borrower then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or
(d)a “change of control” or similar event shall occur as provided in any outstanding Financial Indebtedness of the Borrower (or the documentation governing the same).
“Claims” shall have the meaning provided in the definition of “Environmental Claims”.
“Class” shall mean, when used in reference to (a) any Loan or Borrowing, a reference to whether such Loan, or the Loans comprising such Borrowing, are Initial Term Loans or Delayed Draw Term Loans, (b) any Commitment, a reference to whether such Commitment is a Commitment in respect of Initial Term Loan Commitments or Delayed Draw Term Loan Commitments and (c) any Lender, a reference to whether such Lender has a Loan or Commitment with respect to a particular Class of Loans or Commitments and includes Lenders with Initial Term Loans and Delayed Draw Term Loans. Initial Term Loans and Delayed Draw Term Loans that have different terms and conditions shall be construed to be in different Classes.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.
“Collateral” shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Pledge Agreement Collateral, all Earnings Collateral, Insurance Collateral, all Collateral Vessels, and all cash and Cash Equivalents at any time delivered as collateral thereunder or as required hereunder.
“Collateral and Guaranty Requirements” shall mean, with respect to each Obligor and each Collateral Vessel, the requirements that:
(i)each Subsidiary of the Borrower that is required to be a Subsidiary Guarantor in accordance with the definition thereof shall have duly authorized, executed and delivered to the Administrative Agent the Guaranty, substantially in the form of Exhibit C (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “Guaranty”), or a joinder thereto in form and substance reasonably satisfactory to the

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Administrative Agent (each as modified, supplemented or amended from time to time, a “Joinder Agreement”) and the Guaranty shall be in full force and effect;
(ii)the Borrower and each Subsidiary Guarantor shall have duly authorized, executed and delivered the Pledge Agreement substantially in the form of Exhibit E (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “Pledge Agreement”) or Joinder Agreement and shall have (x) delivered to the Security Agent, as pledgee, all the Pledge Agreement Collateral referred to therein with respect to the Equity Interests in each Subsidiary Guarantor and all Earnings Accounts and (y) duly authorized, executed and delivered any other related documentation necessary or advisable to perfect the Lien on the Pledge Agreement Collateral in the respective jurisdictions of formation of the respective Subsidiary Guarantor or the Borrower, as the case may be;
(iii)the Borrower, each Subsidiary Guarantor, the Security Agent and Nordea (or such other deposit account bank as the Administrative Agent may agree in its sole discretion), as depositary bank, shall have duly executed and delivered a control agreement substantially in the form attached to the Pledge Agreement, (or, in each case, such other form as may be reasonably acceptable to the Administrative Agent), with respect to any Earnings Account owned by the Borrower or such Subsidiary Guarantor;
(iv)the Subsidiary Guarantor (and any other relevant Obligor) that owns such Collateral Vessel shall have duly authorized, executed and delivered (x) an Assignment of Insurances substantially in the form of Exhibit F (as modified, supplemented or amended from time to time, the “Assignment of Insurances”), (y) an Assignment of Earnings substantially in the form of Exhibit G (as modified, supplemented or amended from time to time, the “Assignment of Earnings”) together covering all of such Obligor’s present and future Earnings Collateral and Insurance Collateral, and (z) an Assignment of Charters (existing or future) substantially in the form of Exhibit H (as modified, supplemented or amended from time to time, the “Assignment of Charters”) for any charter or similar contract of employment with a term in excess of 24 months (or, with respect to any charter or similar contract of employment existing on the Borrowing Date, a remaining term in excess of 24 months) (any such charter, a “Pledged Charter”), and shall provide appropriate notices and consents related thereto, together granting a security interest and lien on all of such Obligor’s (i) present and future Earnings Collateral and Insurance Collateral and (ii) present and future right and receivables under Pledged Charters, in each case together with proper Financing Statements (Form UCC-1) in form for filing under the UCC or in other appropriate filing offices of each jurisdiction as may be necessary to perfect the security interests purported to be created by the Assignment of Insurances, the Assignment of Earnings and the Assignment of Charters;
(v)each Subsidiary Guarantor that owns a Collateral Vessel shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry, a Collateral Vessel Mortgage with respect to such Collateral Vessel and such Collateral Vessel Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest in, and lien upon, such Collateral Vessel;
(vi)all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve the security interests described in clauses (i) through and including (v) above shall have been duly effected, including, without limitation, proper financing statements (Form UCC-1) or amendments thereto, as requested by the Administrative Agent or Security Agent, in form for filing under the UCC or in other appropriate filing offices of each jurisdiction as may be necessary to perfect the security

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interests purported to be created by the Security Documents, and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent;
(vii)the Administrative Agent shall have received each of the following:
(a)certificates of ownership from appropriate authorities showing the registered ownership of such Collateral Vessel in the name of the relevant Subsidiary Guarantor in an Acceptable Flag Jurisdiction;
(b)the results of maritime registry searches with respect to such Collateral Vessel, indicating no recorded liens other than Liens in favor of the Security Agent and/or the Lenders and Permitted Liens;
(c)confirmation of class certificates from an Acceptable Classification Society indicating that such Collateral Vessel meets the criteria specified in Section 6.23;
(d)an IHM (together with evidence of the relevant class notation) from an Acceptable Classification Society for each such Collateral Vessel; provided that the Borrower shall have satisfied the requirements of this subclause (vii)(d) as soon as commercially practicable after the Original Closing Date, and in any event, no later than the date of the first dry-docking of such Collateral Vessel following the Original Closing Date (or, solely with respect to Genco Loire and Genco Lorraine, no later than thirty days following the date of the completion of the first dry-docking of such Collateral Vessel following the Original Closing Date) (it being acknowledged and agreed that no IHM shall be required to be delivered prior to the completion of the first dry-docking of such Collateral Vessel following the Original Closing Date);
(e)certified copies of all pooling agreements and agreements related to the technical and commercial management of each Collateral Vessel and a duly executed manager’s undertaking from each Technical Manager in accordance with Section 7.17;
(f)certified copies of all ISM Code and ISPS Code documentation for each Collateral Vessel; and
(g)a report, in form and scope reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent (it being understood that AON, BankServe and Marsh are acceptable) with respect to the insurance maintained by the Obligors in respect of such Collateral Vessel, together with a certificate from such broker certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Administrative Agent, the Security Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance requirements of each respective Collateral Vessel Mortgage (it being understood that, except as required by applicable law, the insurance requirements

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of such Collateral Vessel Mortgage shall not exceed the Required Insurance) and (iii) include copies of the Required Insurance;
(viii)the Administrative Agent shall have received from (a) special New York counsel to each of the Obligors (which shall be Kramer Levin Naftalis & Frankel LLP or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date, (b) if applicable, special Marshall Islands counsel to each of the Obligors (which shall be Reeder & Simpson P.C. or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date, (c) if applicable, special Liberian counsel to each of the Obligors (which shall be Poles, Tublin, Stratakis & Gonzalez LLP or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Original Closing Date, (d) if applicable, special Hong Kong counsel to the Administrative Agent (which shall be Ince & Co. or other counsel qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date, and (e) if applicable, counsel to each of the Obligors in the jurisdiction of the flag of the Collateral Vessel, an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date covering such matters as shall be reasonably required by the Administrative Agent, in each case which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover customary matters, including the perfection of the security interests (other than those to be covered by opinions delivered pursuant to the other opinions above) granted pursuant to the Security Documents, and such other matters incidental to the transactions contemplated herein as the Administrative Agent may reasonably request;
(ix)(a) the Administrative Agent shall have received a certificate, dated the Original Closing Date and reasonably acceptable to the Administrative Agent, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of each Obligor, and attested to by the Secretary or any Assistant Secretary (or, to the extent such Obligor does not have a Secretary or Assistant Secretary, the analogous Person within such Obligor) of such Obligor, as the case may be,  with appropriate insertions, together with copies of the Organizational Documents of such Obligor and the resolutions of such Obligor referred to in such certificate authorizing the consummation of the Transaction and (b) the Administrative Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Administrative Agent may have reasonably requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or Governmental Authorities; and
(x)the Borrower shall have (x) duly authorized, executed and delivered to the Security Agent, as secured party on behalf of the Secured Creditors, a legal, valid and enforceable first priority security interest, in and Lien upon the Equity Interests in the Subsidiary Guarantors pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and (y) effected all filings, deliveries of instruments and other actions necessary or advisable in the reasonable opinion of the Administrative Agent to perfect and preserve each security interest described in this clause (x) in each relevant jurisdiction, as the case may be (including, without limitation, the delivery of customary lien searches, proper financing statements (Form UCC-1) in form for filing under the UCC or in other appropriate filing offices

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of each jurisdiction, Certificated Securities (as such term is defined in Section 8-102(A)(4) of the UCC), executed and undated transfer powers, legal opinions, board resolutions and officer’s certificates), in each case which shall be in form and substance reasonably satisfactory to the Administrative Agent.
“Collateral Disposition” shall mean (i) the sale, lease, transfer, bareboat charter or other disposition by the Borrower or any Subsidiary Guarantor to any Person other than the Borrower or a Subsidiary Guarantor of any Collateral Vessel or (ii) any Event of Loss; provided that (i) any bareboat charter or demise charter entered into with the consent of each Lender and, (ii) any time charter, and (iii) any disposition of the Specified Exchange Collateral Vessels in compliance with the requirements of the Specified Exchange Transactions shall not, in each case, be considered a Collateral Disposition for the purposes of Sections 4.02, 8.03(c) and 8.07(d) of this Agreement.
“Collateral Disposition Prepayment Amount” shall mean, as of the date of any Collateral Disposition, an amount equal to the product of (i) the remainder of (x) the then aggregate principal amount of outstanding Loans and (y) the amount of cash then on deposit in a Cash Collateral Account in connection with any Collateral Disposition prior to such date multiplied by (ii) a fraction, the numerator of which is the Appraised Value (determined on the basis of the Appraisals most recently delivered pursuant to Section 5.02(d) or 7.01(d)) of the Collateral Vessel or Collateral Vessels (as applicable) (other than any Additional Vessels) subject to such Collateral Disposition and the denominator of which is the Aggregate Appraised Value (determined on the basis of the Appraisals most recently delivered pursuant to Section 5.02(d) or 7.01(d)) for all Collateral Vessels (other than any Additional Vessels) then securing the Credit Facility.
“Collateral Disposition Prepayment Date” shall have the meaning provided in Section 4.02(b).
“Collateral Maintenance Test” shall have the meaning provided in Section 8.07(d).
“Collateral Vessel” shall mean (a) each vessel listed on Schedule VI hereto, (b) any Replacement Vessel and, (c) each New Exchange Vessel which is subject to a Collateral Vessel Mortgage, and (d) such other vessel posted as Additional Collateral (such vessel, an “Additional Vessel”); provided that for the purposes of Section 4.02(b), an Additional Vessel shall not be deemed a Collateral Vessel; provided, further, that Schedule VI is automatically updated to (i) remove any Collateral Vessel which is the subject of a Collateral Disposition, (ii) remove any Specified Exchange Collateral Vessel subject to disposition in compliance with the requirements of the Specified Exchange Transactions and (iii) to include any Replacement Vessel, any New Exchange Vessel which is subject to a Collateral Vessel Mortgage, and any Additional Vessel without any further action on the part of the Administrative Agent.
“Collateral Vessel Mortgage” shall mean, with respect to each Collateral Vessel, a first preferred mortgage or a statutory mortgage and deed of covenants, if applicable, in substantially the form of Exhibit D-1, D-2 or D-3 attached hereto, or a first preferred mortgage or statutory mortgage and related deed of covenant (as applicable) in such form as may be reasonably satisfactory to the Administrative Agent and the Borrower (including, without limitation, any first preferred mortgage or statutory mortgage and related deed of covenants, as applicable, delivered pursuant to a Flag Jurisdiction Transfer), as such preferred mortgage or statutory mortgage and deed of covenants, if applicable, may be amended, modified or supplemented from time to time in accordance with the terms of the Credit Documents and thereof granted by the applicable Collateral Vessel Owner in favor of the Security Agent, as security trustee and as mortgagee.
“Collateral Vessel Owner” shall mean, at any time, a Subsidiary Guarantor which owns a Collateral Vessel.

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“Commitment” shall mean an Initial Term Loan Commitment or a Delayed Draw Term Loan Commitment, as the context may require.
“Commitment Commission” shall have the meaning provided in Section 3.01(a).
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Commercial Manager” shall mean collectively, one or more commercial managers selected by the Borrower and reasonably acceptable to the Required Lenders including, without limitation, Genco Ship Management LLC, Genco Shipping Pte., Ltd., Genco Shipping A/S, and any other direct or indirect Wholly Owned Subsidiary of the Borrower that may act as a commercial manager and each Pool Manager.
“Consolidated EBITDA” shall mean, with respect to any Person for any designated period, an amount equal to the Consolidated Net Income of such Person and its Subsidiaries for such period, plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period; (ii) the provision for Federal, state, local and foreign income Taxes (and similar Taxes to the extent based on income or profits) payable by such Person and its Subsidiaries for such period; (iii) depreciation and amortization expense; (iv) extraordinary or non-recurring charges or losses (including without limitation the cumulative effect of changes in GAAP and impairment charges related to long lived assets and goodwill) of such Person and its Subsidiaries which do not represent a cash item in such period or any future period; (v) amortization of expense relating to non-vested awards of Equity Interests; (vi) fees, expenses and losses (if any) in connection with the Transaction and (vii) losses relating to sales, transfers or other dispositions of any Fleet Vessels, minus (b) to the extent included in calculating such Consolidated Net Income, (i) all extraordinary or non-recurring noncash items increasing Consolidated Net Income for such period, (ii) extraordinary gains for such period and (iii) any gains relating to sales, transfers or other dispositions of any Fleet Vessels (which, for the avoidance of doubt, shall not include any charter of any such Fleet Vessel).
“Consolidated Interest Charges” shall mean, with respect to any Person for any designated period, the sum of all interest, premium payments (including any prepayment premium in connection with the prepayment of Financial Indebtedness under the Existing Credit Agreements), debt discount, fees, charges and related expenses of such Person and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with a deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP.
“Consolidated Net Income” shall mean, with respect to any Person for any designated period, the net income (or loss) of such Person and its Subsidiaries for that period determined in accordance with GAAP.
“Consolidated Tangible Net Worth” shall mean, with respect to any Person, the Net Worth of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP after appropriate deduction for any minority interests in Subsidiaries, minus goodwill.
“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Financial Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose

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of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.
“Compliance Certificate” shall have the meaning provided in Section 7.01(e)(i).
“Credit Document Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Administrative Agent, the Security Agent or any Lender pursuant to the terms  of this Agreement or any other Credit Document, including (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrower under this Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Secured Creditors (in the capacities referred to in the definition of Secured Creditors) under this Agreement and each other Credit Document to which the Borrower is a party (including, without limitation, indemnities, fees and interest thereon (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in this Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of or in connection with this Agreement and any such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Obligations include any Excluded Swap Obligations.
“Credit Documents” shall mean this Agreement, the Restatement Agreement, each Delayed Draw Term Note, each Term Note, each Security Document, the Guaranty, each Fee Letter, and, after the execution and delivery thereof, each additional guaranty or additional security document executed pursuant to Section 7.11, 7.21 or 8.07(d) and each other document designated in writing by the Borrower and the Administrative Agent as a Credit Document.
“Credit Facilities” shall mean, collectively, the senior secured term loan facility in the aggregate principal amount of US$460,000,000 as provided under this Agreement and the delayed draw term loan facility in the aggregate principal amount of up to US$35,000,000 as provided under this Agreement.
“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

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“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.
“Delayed Draw Funding Date” shall mean each date on which Delayed Draw Term Loans are made, subject to the conditions set forth in Section 5.03.
“Delayed Draw Funding Period” shall mean the period commencing on the Restatement Effective Date and ending on the Delayed Draw Termination Date.
“Delayed Draw Outstanding Amount” shall mean the aggregate amount of all undrawn Delayed Draw Term Loan Commitments and the outstanding principal amount of Delayed Draw Term Loans.
“Delayed Draw Term Loan” shall mean the Loans made by the Lenders with Delayed Draw Term Loan Commitments to the Borrower pursuant to Section 2.01(c).
“Delayed Draw Term Loan Commitment” shall mean, with respect to any Lender, its obligation to make Delayed Draw Term Loans to the Borrower on the Delayed Draw Funding Date pursuant to Section 2.01(c) in an aggregate amount set forth opposite such Lender’s name on Schedule I-B. The aggregate amount of the Delayed Draw Term Loan Commitments on the Restatement Effective Date is $35,000,000.
“Delayed Draw Term Loan Lender” shall mean each financial institution with a Delayed Draw Term Loan Commitment and/or with an outstanding amount of the Delayed Draw Term Loans and listed on Schedule I-B hereto, as well as any Person which becomes a Lender of Delayed Draw Term Loans hereunder pursuant to Section 11.04(b).
“Delayed Draw Term Note” shall have the meaning set forth in Section 2.04(a).
“Delayed Draw Termination Date” shall mean the earlier to occur of (a) the date on which the Delayed Draw Term Loan Commitments have been fully drawn and reduced to zero in accordance with Section 2.01(c) and (b) March 31, 2020.
“Disqualified Stock” shall mean, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for common shares of the Borrower) pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Credit Document Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for common shares of the Borrower), in whole or in part, (c) provides for the scheduled payments of dividends in cash (except that an Equity Interest shall not be deemed to be within this clause (c) if its terms provide that (i) cash dividends shall not be paid if prohibited by law or any agreement to which the Person is a party or (ii) such Person may substitute dividends of Equity Interests other than Disqualified Stock of such Person for cash) or (d) is or becomes convertible into or exchangeable for Financial Indebtedness or any other Equity Interests that would constitute Disqualified Stock, in each case, prior to the first anniversary of the Maturity Date; provided, however, that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Equity Interest is issued to any employee or to any plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required to be

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repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability.
“Disqualified Lender” shall mean any Person listed on Schedule IX hereto and any affiliates thereof which are clearly identifiable solely on the basis of similarity of name.
“Dividend” with respect to any Person, shall mean that such Person has declared or paid a dividend or distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common stock, a conversion of Equity Interests into common stock or the right to purchase any of such stock of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration of any shares of any class of its capital stock or any other Equity Interests outstanding on or after the Original Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration (other than common stock, Qualified Preferred Stock and the right to purchase any of such stock of such Person) any shares of any class of the capital stock of, or other Equity Interests in, such Person outstanding on or after the Original Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests).  Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.
“Dollars” and the sign “$” shall each mean lawful money of the United States.
“Earnings” shall mean all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower, the Subsidiary Guarantors or the Security Agent and which arise out of the ownership, use, operation or management of a Collateral Vessel, including (but not limited to):
(a)all freight, hire and passage moneys, compensation, proceeds of off-hire insurance, and any other moneys earned, due or payable to the Borrower, the Subsidiary Guarantors or the Security Agent of whatsoever nature arising out of or as a result of the ownership, use, operation or management of the Collateral Vessel, including moneys and claims for moneys due and to become due in the event of the actual or constructive total loss of or requisition of use of or title to the Collateral Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a Collateral Vessel;
(b)all moneys which are at any time payable under Insurances in respect of loss of earnings; and
(c)if and whenever a Collateral Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to a Collateral Vessel.
“Earnings Accounts” shall mean those certain deposit accounts of the Subsidiary Guarantors designated in the Pledge Agreement as being pledged to the Security Agent, which deposit accounts shall be held with the Administrative Agent, and into which the Borrower shall procure that all Earnings and all hires, freights, insurance proceeds, income and other sums payable in respect of the Collateral Vessels are credited and which amounts shall be freely available to the Borrower and the

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Subsidiary Guarantors; so long as no Event of Default has occurred and is continuing and notice has not been given to the Borrower by the Administrative Agent that such amounts shall not be freely available.
“Earnings Collateral” shall have the meaning provided in the Assignment of Earnings.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, Norway and the United Kingdom.
“EEA Resolution Authority” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Transferee” shall mean and include a commercial bank, insurance company, financial institution, fund, trust or other Person which regularly purchases interests in loans or extensions of credit of the types made pursuant to this Agreement, any other Person which would constitute a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act as in effect on the Original Closing Date or other “accredited investor” (as defined in Regulation D of the Securities Act); provided that neither (i) any Obligor or any Affiliate of any Obligor nor (ii) any natural Person  shall be an Eligible Transferee at any time.
“End Date” shall have the meaning set forth in the definition of “Applicable Margin”.
“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, orders, consent decrees, judgments, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.
“Environmental Law” shall mean any applicable Federal, state, foreign or local statute, Legal Requirement, law, treaty, protocol, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, deed or rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Borrower or any of its Subsidiaries, relating to the environment, or to Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution Control Act and the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent relating to exposure to Hazardous Materials); and any state, international, local or foreign counterparts or equivalents thereof, in each case as amended from time to time, and any applicable rules, regulations, or requirements of an Acceptable Classification Society in respect of any Collateral Vessel.

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“Equity Interests” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.
“ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as awarded from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to ERISA, as in effect at the Original Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Eurodollar Rate” shall mean with respect to each Interest Period for the Loans, the interbank offered rate (rounded upward to the nearest 1/100 of one percent) for deposits of Dollars for a period equivalent to such period at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period as is displayed on Reuters LIBOR 01 Page (or such other service as may be nominated by the ICE Benchmark Administration) (the “Screen Rate”) (or, if the Screen Rate is not available at such time, a comparable successor interbank rate for deposits in US Dollars that is, at such time, broadly accepted by the syndicated loan market in lieu of the London Interbank Offered Rate or, if no such broadly accepted comparable successor interbank rate exists at such time, a successor index rate as the Administrative Agent may determine with the consent of the Borrower and the Required Lenders (which shall not be unreasonably withheld or delayed); provided that any such required consent shall be deemed to be given if such party fails to object to a request by the Administrative Agent for such consent within five (5) Business Days after such request); provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided, further, that if on such date no such rate is so displayed, the Eurodollar Rate for such period shall be the arithmetic average (rounded upward to the nearest 1/100 of 1%) of the rate quoted to the Administrative Agent by the Reference Banks for deposits of Dollars in an amount approximately equal to the amount in relation to which the Eurodollar Rate is to be determined for a period equivalent to such applicable Interest Period by the prime banks in the London interbank Eurodollar market at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period, in each case divided (and rounded upward to the nearest 1/100 of 1%) by a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D); provided that in the event the Eurodollar Rate calculated in the immediately preceding proviso shall be less than zero, the Eurodollar Rate for such period shall be deemed to be zero for the purposes of this Agreement.
“Event of Default” shall have the meaning provided in Section 9.
“Event of Loss” shall mean any of the following events: (x) the actual or constructive total loss of a Collateral Vessel or the agreed or compromised total loss of a Collateral Vessel; or (y) the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Collateral Vessel.  An Event of Loss shall be deemed to have occurred: (i) in the event of an actual loss of a Collateral Vessel, at the time and on the date of such loss or, if that is not known, at noon Greenwich Mean Time on the date which such Collateral Vessel was last

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heard from; (ii) in the event of damage which results in a constructive or compromised or arranged total loss of a Collateral Vessel, at the time and on the date on which notice claiming the loss of the Collateral Vessel is given to the insurers; or (iii) in the case of an event referred to in clause (y) above, at the time and on the date on which such event is expressed to take effect by the Person making the same.  Notwithstanding the foregoing, if such Collateral Vessel (a) shall have been returned to any Obligor following any event referred to in clause (y) above or (b) shall have been replaced by a Replacement Vessel in accordance with the requirements of Section 4.02(b), in each case, prior to the date upon which payment is required to be made under Section 4.02(b), then no Event of Loss shall be deemed to have occurred by reason of such event.
“Exchange Act” shall mean the Securities Exchange Act of 1934.
“Excluded Swap Obligation” shall mean, with respect to any Obligor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Obligor of, or the grant by such Obligor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Obligor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Obligor or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Loans or Commitments pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loans or Commitments (other than pursuant to an assignment request by the Borrower under Section 2.11) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.04, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.04(c), and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Executive Order” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2011.
“Existing Credit Agreements” shall mean, collectively:
(a)that certain $400 million Senior Secured Credit Agreement, dated as of November 10, 2016, by and among the Borrower, Nordea (f/k/a Nordea Bank Finland Plc, New York Branch), as administrative agent, security agent and co-ordinator, the lenders from time to time party thereto and the other parties thereto (as amended, restated, modified and/or supplemented prior to the Original Closing Date);
(b)that certain $16.8 million Secured Loan Agreement, dated as of October 8, 2014, by and among Baltic Hornet Limited, as borrower, ABN AMRO Capital USA LLC, as

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administrative agent and security agent, the lenders from time to time party thereto and the other parties thereto (as amended, restated, modified and/or supplemented prior to the Original Closing Date);
(c)that certain $16.8 million Secured Loan Agreement, dated as of October 8, 2014, by and among Baltic Wasp Limited, as borrower, ABN AMRO Capital USA LLC, as administrative agent and security agent, the lenders from time to time party thereto and the other parties thereto (as amended, restated, modified and/or supplemented prior to the Original Closing Date);  and
(d)that certain $100 million Facility Agreement, dated as of November 4, 2015, by and among Genco Holdings Limited, as holdco, each of the entities listed in schedule 1 part I thereto, as joint and several borrowers, Hayfin Services LLP, as administrative agent and security agent, the lenders from time to time party thereto and the other parties thereto (as amended, restated, modified and/or supplemented prior to the Original Closing Date).
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(i) of the Code and any intergovernmental agreement, or legislation to implement the foregoing.
“FCPA” shall have the meaning provided in Section 6.10(d).
“Federal Funds Rate” shall mean, for any day, a rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 A.M. (New York time) on such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.
“Fee Letters” shall mean any letter agreement between, inter alios, the Administrative Agent and any Obligor or the Lead Arrangers and any Obligor with respect to fees payable pursuant to or in connection with this Agreement.
“Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01(b).
“Financial Covenants” shall mean the covenants set forth in Section 8.07.
“Financial Indebtedness” shall mean any obligation for the payment or repayment of money, whether present or future, actual or contingent, in respect of (i) moneys borrowed; (ii) any acceptance credit; (iii) any bond, note, debenture, loan stock or similar instrument; (iv) any finance or capital lease; (v) receivables sold or discounted (other than on a non-recourse basis); (vi) deferred payments for assets or services; (vii) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; (viii) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; (ix) all Disqualified Stock; and (x) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in clauses (i) through (ix) above; provided that the Financial Indebtedness shall not in any event include trade payables and expenses accrued in the ordinary course of business or any obligation under any Hedging Agreement.

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“Fifth Amendment” shall mean that certain Fifth Amendment to Amended and Restated Credit Agreement, dated as of December 17, 2020, by and among the Borrower, the Subsidiary Guarantors, the Lenders party thereto, the Administrative Agent and the Security Agent.
“Fifth Amendment Effective Date” shall have the meaning set forth in the Fifth Amendment.
“First Amendment” shall mean that certain First Amendment to Amended and Restated Credit Agreement, dated as of June 28, 2019, by and among the Borrower, the Subsidiary Guarantors, the Lenders party thereto, the Administrative Agent and the Security Agent.
“First Amendment Effective Date” shall have the meaning set forth in the First Amendment.
“Flag Jurisdiction” shall mean, with respect to any Collateral Vessel, the flag jurisdiction of such Collateral Vessel on the Borrowing Date, which, for the avoidance of doubt, must be an Acceptable Flag Jurisdiction.
“Flag Jurisdiction Transfer” shall mean the transfer of the registration and flag of a Collateral Vessel from one Acceptable Flag Jurisdiction to another Acceptable Flag Jurisdiction; provided that the following conditions are satisfied with respect to such exchange or transfer:
(a)On each Flag Jurisdiction Transfer Date, the Obligor which is consummating a Flag Jurisdiction Transfer on such date shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry a Collateral Vessel Mortgage (which Collateral Vessel Mortgage shall, to the extent possible, be registered as a “continuation mortgage” to the original Collateral Vessel Mortgage recorded in the initial Acceptable Flag Jurisdiction) with respect to the Collateral Vessel being transferred (the “Transferred Collateral Vessel”) and such Collateral Vessel Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Collateral Vessel, subject only to Permitted Liens.  All filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve such security interests shall have been duly effected and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent.
(b)On each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received from counsel to the Obligors consummating the relevant Flag Jurisdiction Transfer reasonably satisfactory to the Administrative Agent practicing in those jurisdictions in which the Transferred Collateral Vessel is registered and/or the Obligor owning such Transferred Collateral Vessel is organized, opinions which shall be addressed to the Administrative Agent and each of the Lenders and dated such Flag Jurisdiction Transfer Date, which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover the perfection of the security interests granted pursuant to the Collateral Vessel Mortgage(s) and such other matters incident thereto as the Administrative Agent may reasonably request.
(c)On each Flag Jurisdiction Transfer Date:
(i)the Administrative Agent shall have received (x) a certificate of ownership issued by the registry of the applicable Acceptable Flag Jurisdiction showing the registered ownership of the Transferred Collateral Vessel transferred on such date in the name of the relevant Subsidiary Guarantor and (y) a certificate of ownership and encumbrance or, as applicable, a transcript of registry with respect to the Transferred

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Collateral Vessel transferred on such date, indicating no record liens other than Liens in favor of the Security Agent and/or the Lenders and Permitted Liens; and
(ii)the Administrative Agent shall have received a report, in form and scope reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent with respect to the insurance maintained by the Obligor in respect of the Transferred Collateral Vessel transferred on such date, together with a certificate from such broker certifying that such insurances (x) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Security Agent as mortgagee and (y) conform with the insurance requirements of the respective Collateral Vessel Mortgages.
(d)On or prior to each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by an Authorized Officer, member, or general partner of the Obligor consummating such Flag Jurisdiction Transfer, certifying that (i) all necessary governmental (domestic and foreign) and third party approvals and/or consents, including evidence of deletion from the existing Flag Jurisdiction, in connection with the Flag Jurisdiction Transfer being consummated on such date and otherwise referred to herein shall have been obtained and remain in effect or that no such approvals and/or consents are required, (ii) there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement and (iii) copies of any authorizing resolutions approving the Flag Jurisdiction Transfer of such Obligor and any other matter the Administrative Agent may request.
(e)On each Flag Jurisdiction Transfer Date, the Collateral and Guaranty Requirements for the Transferred Collateral Vessel shall have been satisfied.
(f)On each Flag Jurisdiction Transfer Date, (i) no Event of Default has occurred and is continuing and (ii) all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).
“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag Jurisdiction Transfer occurs.
“Fleet Vessels” shall mean any vessel (including the Collateral Vessels) from time to time owned by the Borrower or any of its Subsidiaries.
“Foreign Official” shall mean an officer, employee, or any person acting on behalf of any foreign governmental body at the national, state, county, city, municipal, or any other level (including any department, agency, or instrumentality thereof), as well as entities partially or wholly-owned or controlled by such a governmental body, state-owned or controlled companies, and entities owned by sovereign wealth funds.  The term also includes any officer, employee, or any person acting on behalf of a public international organization, a political party, party official, or candidate thereof.
“Foreign Pension Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or

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other similar program provides, or results in, retirement income, and which plan would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA.
“GAAP” shall have the meaning provided in Section 11.07(a).
“Governmental Authority” shall mean the government of the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guaranty” shall mean the guaranty substantially in the form of Exhibit C hereto to be executed by each Subsidiary Guarantorhave the meaning set forth in the definition of “Collateral and Guaranty Requirements”.
“Hazardous Materials” shall mean: (a) any petroleum or petroleum products, petroleum byproducts, petroleum breakdown products, radioactive materials, asbestos or asbestos-containing material in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic waste,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under any Environmental Law.
“Hedging Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement, interest rate floor agreement, foreign currency swap, or other similar agreement or arrangement meant to hedge interest rate or currency fluctuations.
“Highest Applicable Rate” shall have the meaning set forth in the definition of “Applicable Margin”.
“IHM” means, in relation to a Fleet Vessel, an inventory of hazardous materials (also known as a green passport) issued by that Fleet Vessel's classification society, which includes a list of any and all materials known to be potentially hazardous and listed in the construction of or on board that Fleet Vessel, their location and approximate quantities.
“Indemnified Parties” shall have the meaning provided in Section 11.01(b).
“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Obligor under any Credit Document and (b) to the extent not otherwise described in preceding clause (a), Other Taxes.
“Initial Borrowing Date” shall mean the date on which the Initial Term Loan was incurred by the Borrower pursuant to Section 2.01(a), subject to the conditions set forth in Section 5.
“Initial Borrowing Date Refinancing” shall mean the termination of the Existing Credit Agreements and any commitments thereunder, the repayment of all obligations in connection therewith and the release or termination of all Liens securing the Existing Credit Agreements (or the making of reasonably satisfactory arrangements for their release or termination substantially contemporaneously with the Initial Borrowing Date).

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“Initial Term Loan” shall have the meaning provided in Section 2.01(a).
“Initial Term Loan Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I-A hereto as the same may be (x) terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.11 or 11.04(b). The Initial Term Loan Commitment as of the Original Closing Date was US$460,000,000.
“Initial Term Loan Commitment Termination Date” shall mean June 30, 2018.
“Insurance Collateral” shall have the meaning provided in the Assignment of Insurances.
“Interest Determination Date” shall mean the second Business Day prior to the commencement of any Interest Period relating to the Loans.
“Interest Period” shall have the meaning provided in Section 2.07.
“Interest Rate” shall have the meaning provided in Section 2.06(a).
“International Group” shall have the meaning provided in Schedule IV-A.
“Investments” shall have the meaning provided in Section 8.05.
“ISM Code” shall mean the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time.
“ISPS Code” shall mean the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation (“IMO”) adopted by a diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) to take effect on 1 July 2004.
“Joinder Agreement” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.
“Lead Arrangers” shall have the meaning provided in the first paragraph of this Agreement.
“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.
“Legal Requirement” shall mean, as to any Person, any law, treaty, convention, statute, ordinance, decree, award, requirement, order, writ, judgment, injunction, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority which is binding on such Person.
“Lender” shall mean each financial institution with a Commitment and/or with an outstanding amount of the Loans and listed on Schedule I-A or Schedule I-B hereto, as well as any Person which becomes a “Lender” hereunder pursuant to Section 11.04(b).
“Lender Creditors” shall mean the Lenders holding from time to time an outstanding amount of the Loans and/or Commitments, the Administrative Agent and the Security Agent, each in their respective capacities.

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“Lender Default” shall mean, as to any Lender, (a) the wrongful refusal (which has not been retracted) of such Lender or the failure of such Lender (which has not been cured) to make available its portion of any Borrowing when required to do so in accordance with the terms of this Agreement unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority under any Debtor Relief Law or had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, (c) such Lender has become the subject of a Bail-In Action or (d) such Lender having notified the Administrative Agent and/or any Obligor (x) that it does not intend to comply with its obligations under Section 2.01(a) in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Section (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied) or (y) of the events described in preceding clauses (b) or (c); provided that, for purposes of (and only for purposes of) Section 2.11, the term “Lender Default” shall also include, as to any Lender, (i) any Affiliate of such Lender that has “control” (within the meaning provided in the definition of “Affiliate”) of such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority under any Debtor Relief Law, (ii) any previously cured “Lender Default” of such Lender under this Agreement, unless such Lender Default has ceased to exist for a period of at least 90 consecutive days, (iii) any default by such Lender with respect to its obligations under any other credit facility to which it is a party and which the Administrative Agent believes in good faith has occurred and is continuing and (iv) the failure of such Lender to make available its portion of any Borrowing within one (1) Business Day of the date (x) the Administrative Agent (in its capacity as a Lender) or (y) Lenders constituting the Required Lenders has or have, as applicable, funded its or their portion thereof.
“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice validly filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).
“Loan” or “Loans” shall mean the Initial Term Loans and the Delayed Draw Term Loans, as applicable.
“Major Casualty” shall mean, in relation to a Collateral Vessel, any casualty to that Collateral Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,500,000 or the equivalent in any other currency.
“Margin Regulations” shall mean Regulations T, U and X issued by the Board of Governors of the United States Federal Reserve System and any successor regulations thereto, as in effect from time to time.
“Margin Stock” shall have the meaning provided in Regulation U.
“Market Disruption Event” shall mean either of the following events:

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(a)if, at or about noon on the Interest Determination Date for the relevant Interest Period, the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Administrative Agent to determine the Eurodollar Rate for the relevant Interest Period; or
(b)before close of business in New York on the Interest Determination Date for the relevant Interest Period, the Administrative Agent receives notice from a Lender or Lenders whose outstanding Loans exceed 50% of the aggregate Loans outstanding at such time that (i) the cost to such Lenders of obtaining matching deposits in the London interbank Eurodollar market for the relevant Interest Period would be in excess of the Eurodollar Rate for such Interest Period or (ii) such Lenders are unable to obtain funding in the London interbank Eurodollar market.
“Material Adverse Effect” shall mean any event, change or condition that, individually or taken as a whole has had or could reasonably be expected to have a material adverse effect (w) on the rights or remedies of the Lender Creditors, (x) on the ability of the Borrower or any Subsidiary Guarantor, or the Borrower and its Subsidiaries taken as a whole, to perform its or their obligations to the Lender Creditors, (y) with respect to the Transaction or (z) on the property, assets, operations, liabilities, condition (financial or otherwise), or prospects of the Borrower or any Subsidiary Guarantor, or the Borrower and its Subsidiaries taken as a whole.
“Materiality Amount” shall mean $7,500,000.
“Maturity Date” shall mean the fifth anniversary of the Original Closing Date.
“Minimum Repayment Profile” shall have the meaning given to it in Section 4.02(a).
“Money Laundering” shall have the meaning given to it in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of the European Union and the Directive (EU) 2015/849 of the European Parliament and of the Council of the European Union and shall include any analogous definition provided in any anti-money laundering laws and regulations, including the PATRIOT Act enacted by any Sanctions Authority or any other relevant Governmental Authority.
“Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.
“Mortgagee’s Insurances” means all policies and contracts of mortgagees interest insurance, mortgagees interest insurance additional perils (pollution) insurance and any other insurance from time to time taken out by the Security Agent in relation to a Collateral Vessel.
“Multiemployer Plan” shall mean an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) which is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) and which is currently contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code), and any such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) to which the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code) contributed to or had an obligation to contribute to such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) during the preceding five-year period.
“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock.

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“New Exchange Vessels” shall mean collectively, (i) the Marshall Islands flag vessel TR Prince (to be renamed Genco Freedom), built in 2015 at Jiangsu New Hantong Ship Heavy Industry Co., Ltd. with IMO number 9424651, (ii) the Marshall Islands flag vessel TR Princess (to be renamed Genco Vigilant), built in 2015 at Jiangsu New Hantong Ship Heavy Industry Co., Ltd. with IMO number 9742663, and (iii) the Marshall Islands flag vessel TR Niklas (to be renamed Genco Magic), built in 2014 at Jiangsu New Hantong Ship Heavy Industry Co., Ltd. with IMO number 9707364.
“New Exchange Vessel Owner” shall mean each Wholly-Owned Subsidiary of the Borrower which acquires a New Exchange Vessel.
“Non-Consenting Lender” shall have the meaning provided in Section 11.13(b).
“Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.
“Nordea” shall have the meaning provided in the first paragraph of this Agreement.
“Note” shall have the meaning provided in Section 2.04(a).
“Notice of Borrowing” shall have the meaning provided in Section 2.02.
“Notice Office” shall mean the office of the Administrative Agent located at 1211 Avenue of the Americas, 23rd Floor New York, New York 10036, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.
“Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Administrative Agent, the Security Agent or any Lender pursuant to the terms  of this Agreement or any other Credit Document, including (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrower under this Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Secured Creditors (in the capacities referred to in the definition of Secured Creditors) under this Agreement and each other Credit Document to which the Borrower is a party (including, without limitation, indemnities, fees and interest thereon (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in this Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of or in connection with this Agreement and any such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Obligations include any Excluded Swap Obligations.
“Obligors” shall mean the Borrower and each Subsidiary Guarantor and “Obligor” shall mean any one of them.
“OPA” shall mean the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq., 46 U.S.C. §3703(a) et seq.
“Organizational Documents” with respect to any Obligor shall mean the memorandum of association or certificate of incorporation, as the case may be, certificate of formation (including, without limitation, by the filing or modification of any certificate of designation), by-laws, limited liability company agreement or partnership agreement (or equivalent organizational documents) of such Obligor.

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“Original Closing Date” shall mean the “Closing Date” under and as defined in the Original Credit Agreement.
“Original Credit Agreement” shall have the meaning set forth in the recitals hereto.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in the Loans or Credit Document).
“Other Creditors” shall mean any Lender or any affiliate thereof and their successors and assigns if any (even if such Lender or affiliate subsequently ceases to be a Lender or affiliate of a Lender under this Agreement for any reason), with which the Borrower enters into any Secured Hedging Agreements from time to time.
“Other Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Other Creditors (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Other Creditors (in the capacities referred to in the definition of Other Creditors) under any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereafter arising and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in therein.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Other Obligations include any Excluded Swap Obligations.
“Other Taxes” shall have the meaning provided in Section 4.04(b).
“Participant Register” shall have the meaning provided in Section 11.04(a).
“PATRIOT Act” shall have the meaning provided in Section 11.21.
“Payment Date” shall mean the last Business Day of each March, June, September and December occurring after the Original Closing Date and commencing with the last Business Day of December 2018. For the avoidance of doubt, Scheduled Repayments of Delayed Draw Term Loans shall not commence until the Payment Date occurring on the last Business Day of March 2020.
“Payment Office” shall mean the office of the Administrative Agent located at 1211 Avenue of the Americas, 23rd Floor New York, New York 10036, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.
“Permitted Holders” shall mean Apollo Global Management LLC, Centerbridge Partners L.P., and Strategic Value Partners, LLC; their respective Affiliates; and their respective funds, managed accounts, and related entities managed by any of them or their respective Affiliates, or Wholly-Owned Subsidiaries of the foregoing; but not including, however, any of their operating portfolio companies.
“Permitted Liens” shall have the meaning provided in Section 8.01.

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“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.
“Plan” shall mean any “employee pension benefit plan” as defined in Section 3(2) of ERISA, which is currently maintained or contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate and which is subject to ERISA.
“Pledge Agreement” shall mean the pledge agreement in connection with the Earnings Accounts and the Equity Interests of each Subsidiary Guarantor substantially in the form of Exhibit E to be executed by the Borrower and each Subsidiary Guarantor, as applicable.have the meaning set forth in the definition of “Collateral and Guaranty Requirements”.
“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the Pledge Agreement.
“Pledged Charter” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.
“Pool Manager” shall mean Clipper Group (Management) Ltd. – Clipper Logger Pool, Clipper Bulk A/S – Clipper Sapphire Pool, AS Klaveness Chartering – Bulkhandling Handymax AS, Lauritzen Bulkers, Navig8 Bulk Pool Inc., Baumarine AS, Oslo and any other internationally reputable pool managers (in the reasonable opinion of the Administrative Agent).
“Preferred Equity”, as applied to the Equity Interests of any Person, shall mean Equity Interests of such Person (other than common Equity Interests of such Person) of any class or classes (however designed) that ranks prior, as to the payment of dividends or as to the distribu­tion of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Equity Interests of any other class of such Person, and shall include any Disqualified Stock.
“Pro Rata Share” shall have the definition provided in Section 4.05(b).
“Qualified Preferred Stock” shall mean any Preferred Equity Interest other than Disqualified Stock.
“Quarterly Pricing Certificate” shall have the meaning set forth in the definition of “Applicable Margin”.
“Recipient” shall mean (a) any Agent and (b) any Lender.
“Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.
“Reference Banks” shall mean, at any time, each Lender which agrees to act as a Reference Bank.
“Register” shall have the meaning provided in Section 11.17.
“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

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“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.
“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.
“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.
“Release” shall mean any releasing or threatening to release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into, on or about the environment or any structure. “Released” shall have a corresponding meaning.
“Replaced Lender” shall have the meaning provided in Section 2.11.
“Replacement Lender” shall have the meaning provided in Section 2.11.
“Replacement Vessel” shall mean a vessel replacing one or more Collateral Vessels in accordance with the requirements set forth pursuant to Section 4.02(b). Such Replacement Vessel must be (i) a dry bulk vessel, (ii) between 34,000 dwt and 210,000 dwt, (iii) not in excess of 5 years of age when it becomes a Collateral Vessel, (iv) classed with an Acceptable Classification Society, (v) registered under the flag of an Acceptable Flag Jurisdiction, (vi) built at a reputable yard and (vii) owned by a Subsidiary Guarantor; provided that, for the avoidance of doubt, no New Exchange Vessel shall be a Replacement Vessel for any purpose hereunder.
“Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan (other than any Plan maintained by a Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code or any Multiemployer Plan) that is subject to Title IV of ERISA other than those events as to which the 30-day notice period referred to in Section 4043 is waived.
“Representative” shall have the definition provided in Section 4.05(e).
“Required Insurance” shall mean insurance as set forth on Schedule IV-A hereto.
“Required Delayed Draw Term Loan Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding principal amount of the Delayed Draw Term Loans and Delayed Draw Term Loan Commitments at such time represents in excess of 66 2/3% of the sum of all outstanding principal amount of the Delayed Draw Term Loans and available Delayed Draw Term Loan Commitments of Non-Defaulting Lenders.
“Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding principal amount of the Loans and Commitments at such time represents in excess of 66 2/3% of the sum of all outstanding principal amount of the Loans and available Commitments of Non-Defaulting Lenders.
“Restatement Agreement” shall have the meaning set forth in the recitals hereto.
“Restatement Effective Date” shall have the meaning set forth in the Restatement Agreement.
“Restricted Cash and Cash Equivalents” shall mean all cash and Cash Equivalents of the Borrower and its Subsidiaries other than Unrestricted Cash and Cash Equivalents.

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“Restricted Party” shall mean a Person (a) that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); (b) that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a Sanctioned Country; (c) that is subject to restrictions under Sanctions Laws for being  directly or indirectly owned 50% or more by or otherwise controlled by a Person referred to in clauses (a) and/or (b) above; or (d) with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.
“Returns” shall have the meaning provided in Section 6.11(b).
“S&P” shall mean S&P Global Inc., and its successors.
“Sanctions Authority” shall mean (a) the United Nations, the European Union, the member states of the European Union, the Kingdom of Norway, the United States of America and any authority acting on behalf of any of them in connection with Sanctions Laws, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the U.S. Department of State and Her Majesty’s Treasury of the United Kingdom and (b) otherwise, any other jurisdiction where an Obligor or is organized or whose law is applicable to an Obligor.
“Sanctions Laws” shall mean all economic or financial sanctions laws and/or regulations, trade embargoes, freezing provisions, prohibitions, restructure measures, decisions, executive orders or notices from regulators implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority.
“Sanctions List” shall mean any list of prohibited persons, vessels or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority that has the effect of prohibiting transactions with such persons, including the Specially Designated Nationals and Blocked Persons List and other prohibited party lists maintained by OFAC or any list of Persons issued by OFAC, including the Executive Order, at its official website or any replacement website or other replacement official publication
“Sanctioned Country” shall mean, at any time, a country, region or territory which is itself, or whose government is, the subject or target of any comprehensive country-wide, region-wide or territory-wide Sanctions Laws.
“Scheduled Repayment” shall mean (i) for each Payment Date until the Maturity Date, an amount equal to 100% of the Amortization Amount and (ii) on the Maturity Date, an amount equal to the remaining outstanding amount of the Initial Term Loans and the Delayed Draw Term Loans as of such date, in each case, as set forth on Schedule X-1 or Schedule X-2, as applicable (as such Schedule may be amended, modified, supplemented and/or replaced by the Administrative Agent in accordance with Section 4.02(a)). The Administrative Agent shall, at the request of the Borrower, following a sale of a Collateral Vessel pursuant to Section 8.02(a) and/or substitution with a Replacement Vessel pursuant to Section 4.02(b) and/or at the end of the Specified Exchange Period, issue a recalculated Schedule X-1 or Schedule X-2, as applicable.
“Screen Rate” shall have the meaning provided in the definition of Eurodollar Rate.
“Scrubber Acquisitions” shall mean the acquisitions and installations (and costs related thereto) of scrubbers, together with ancillary parts and equipment required in connection therewith and services related thereto, for 17 Capesize dry bulk vessels incurred by and invoiced to the Borrower or its Subsidiaries, and “Scrubber Acquisition” shall mean any such singular acquisition and installation.

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“Secured Creditors” shall mean collectively the Other Creditors together with the Lender Creditors.
“Secured Credit Agreement Hedging Agreement” shall mean any Hedging Agreement entered into with an Other Creditor meant to hedge interest rate or currency fluctuations under this Agreement.
“Secured Hedging Agreement” shall mean (i) any Secured Credit Agreement Hedging Agreement and (ii) any Secured Other Hedging Agreement.
“Secured Other Hedging Agreement” shall mean any Hedging Agreement entered into with an Other Creditor other than a Secured Credit Agreement Hedging Agreement.
“Secured Obligations” shall mean (a) the Credit Document Obligations, (b) the Other Obligations, (c) any and all sums advanced by the Security Agent in order to preserve the Collateral or preserve its security interest in the Collateral, (d) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of the Obligors referred to in clauses (a) and (b) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Security Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs, and (e) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under the Security Documents.  In no event will the Secured Obligations include any Excluded Swap Obligations.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Security Agent” shall mean the Administrative Agent acting as mortgagee, security trustee or security agent for the Secured Creditors pursuant to the Security Documents.
“Security Documents” shall mean the Guaranty, the Pledge Agreement, the Assignment of Earnings, the Assignment of Charter, the Assignment of Insurances, each Collateral Vessel Mortgage and, after the execution and delivery thereof, each additional security document executed pursuant to Section 7.11 or Section 7.21.
“Specified Currency” shall have the meaning provided in Section 11.18.
“Specified Exchange Collateral Vessel Owner” shall mean the Collateral Vessel Owner of each of the Specified Exchange Collateral Vessels.
“Specified Exchange Collateral Vessels” shall mean each of the following Collateral Vessels: GENCO OCEAN, BALTIC COVE, GENCO AVRA, GENCO MARE, GENCO SPIRIT and BALTIC FOX.
“Specified Exchange Period” shall mean the period commencing with the Fifth Amendment Effective Date and ending on the earlier of (i) the date on which the final Specified Exchange Collateral Vessel is sold or exchanged in a Specified Exchange Transaction and (ii) March 31, 2021.
“Specified Exchange Transactions” shall mean the transactions described in Section 7.21 and “Specified Exchange Transaction” means any one of such transactions.
“Start Date” shall have the meaning set forth in the definition of “Applicable Margin”.
“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the

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directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than 50% of the Equity Interests at the time.
“Subsidiary Guarantor” shall mean each Wholly-Owned Subsidiary, whether direct or indirect, of the Borrower that owns, directly or indirectly, any Collateral Vessel, on a joint and several basis, each such Subsidiary to be party to the Guaranty or execute a counterpart thereof or a Joinder Agreement with respect thereto after the Original Closing Date.
“Swap Obligation” shall mean, with respect to any Obligor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Technical Manager” shall mean any of Anglo-Eastern Shipmanagement, Synergy Group, Vships USA LLC and Wallem Ship Management Limited, or any Affiliates of the foregoing which provide such technical management services, or one or more other technical managers selected by the Borrower and reasonably acceptable to the Required Lenders.
“Technical Management Agreements” shall mean, collectively, all of the technical ship management agreements with respect to the relevant Collateral Vessels and entered into with the relevant Technical Manager, each as in effect on the date hereof and without giving effect to any amendments, restatements, supplements or other modifications thereto and any other technical ship management agreement entered into in substitution of any thereof and meeting the requirements of Section 8.12.
“Term Note” shall have the meaning set forth in Section 2.04(a).
“Test Period” shall mean each period of four consecutive fiscal quarters, in each case taken as one accounting period.
“Total Capitalization” shall mean, at any time of determination for any Person, the sum of Total Indebtedness of such Person at such time and Consolidated Tangible Net Worth of such Person at such time.
“Total Commitment” shall mean, at any time, the sum of the Commitments of each of the Lenders at such time.
“Total Delayed Draw Commitments” shall mean, at any time, the sum of the Delayed Draw Commitments of each of the Lenders at such time.
“Total Indebtedness” shall mean, as at any date of determination for any Person, the aggregate stated balance sheet amount of all Financial Indebtedness (but including in any event the then outstanding principal amount of the Loans) of such Person and its Subsidiaries on a consolidated basis as determined in accordance with GAAP.
“Total Net Leverage Ratio” shall mean, with respect to any Test Period, the ratio of (a) (i) Total Indebtedness of the Borrower and its Subsidiaries outstanding as of the last day of such Test Period

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minus (ii) all cash and Cash Equivalents of the Borrower and its Subsidiaries to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for such Test Period.
“Transaction” shall mean, collectively, (a) the Initial Borrowing Date Refinancing on the Original Closing Date, (b) the entering into of the Credit Documents and the incurrence of the Initial Term Loans and the Delayed Draw Term Loan Commitments hereunder, (c) the payment of all fees and expenses in connection with the foregoing, and (d) the consummation of the transactions on the Original Closing Date or Restatement Effective Date, as applicable, related to the foregoing.
“Transferred Collateral Vessel” shall have the meaning provided in the definition of “Flag Jurisdiction Transfer” in this Section 1.01.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.
“Unfunded Current Liability” of any Plan shall mean the amount, if any, as of the most recent valuation date for the applicable Plan, by which the present value of the Plan’s benefit liabilities determined in accordance with actuarial assumptions at such time consistent with those prescribed by Section 430 of the Code and Section 303 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA.
“United States” and “U.S.” shall each mean the United States of America.
“Unrestricted Cash and Cash Equivalents” shall mean, when referring to cash or Cash Equivalents of the Borrower or any of its Subsidiaries, that such cash or Cash Equivalents (i) does not appear (or would not be required to appear) as “restricted” on a consolidated balance sheet of the Borrower or of any such Subsidiary, (ii) are not subject to a Lien in favor of any Person (other than a Lien in connection with any Financial Indebtedness permitted hereunder) or (iii) are otherwise generally available for use by the Borrower or such Subsidiary.
“Unutilized Commitment” shall mean, at any time, the Total Commitment at such time less the aggregate outstanding principal amount of the Loans made at such time.
“Vessel Exchange MOA” means each of the following:
(i)the memorandum of agreement, dated December 17, 2020 by and among TR Prince Shipping Ltd, as Sellers and Genco Freedom Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (i) of the definition thereof and the Collateral Vessels Genco Avra and Genco Mare;
(ii)the memorandum of agreement, dated December 17, 2020 by and among TR Princess Shipping Ltd, as Sellers and Genco Vigilant Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (ii) of the definition thereof and the Collateral Vessels Baltic Cove and Baltic Fox; and
(iii)the memorandum of agreement, dated December 17, 2020 by and among TR Niklas Shipping Ltd, as Sellers and Genco Magic Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (iii) of the definition thereof and the Collateral Vessels Genco Ocean and Genco Spirit.
“Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100% of whose capital stock (other than director’s qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or

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more Wholly-Owned Subsidiaries of such Person has directly or indirectly 100% of the Equity Interests at such time.
“Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
1.02Other Definitional Provisions.  (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Credit Documents or any certificate or other document made or delivered pursuant hereto or thereto.
(b)As used herein and in the other Credit Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms not defined in Section 1.01 shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) unless the context otherwise requires, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights, (v) the word “will” shall be construed to have the same meaning and effect as the word “shall” and (vi) unless the context otherwise requires, any reference herein (A) to any Person shall be construed to include such Person’s successors and assigns and (B) to the Borrower or any other Obligor shall be construed to include the Borrower or such Obligor as debtor and debtor-in-possession and any receiver or trustee for the Borrower or any other Obligor, as the case may be, in any insolvency or liquidation proceeding.
(c)The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified and shall include all amendments, restatements, supplements and/or modifications thereto from time to time, including on the Restatement Effective Date pursuant to the Restatement Agreement.
(d)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
1.03Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).
SECTION 2Amount and Terms of Credit Facilities
2.01The Commitments. (a) Subject to and upon the terms and conditions set forth herein, each Lender with a Commitment on the Original Closing Date made a term loan (the “Initial Term Loan”) to the Borrower, which Initial Term Loan: (i) was incurred pursuant to a single drawing of $460,000,000 made by the Borrower on the Initial Borrowing Date, (ii) is denominated in Dollars and (iii) was made by each such Lender in an aggregate principal amount which did not exceed the Commitment of such Lender on the Initial Borrowing Date (determined before giving effect on the Initial Borrowing

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Date to the termination thereof on such date pursuant to Section 3.03).  Once repaid, the Initial Term Loan incurred hereunder may not be reborrowed.
(b)[Reserved].
(c)Subject to and upon the terms and conditions set forth herein and in the Restatement Agreement, each Lender with a Delayed Draw Term Loan Commitment severally agrees to make Delayed Draw Term Loans from time to time during the Delayed Draw Term Loan Funding Period in an aggregate amount not to exceed at any time outstanding, the amount of such Lender’s Delayed Draw Term Loan Commitment, so long as after giving effect to any Borrowing of Delayed Draw Term Loans, the aggregate amount of Delayed Draw Term Loans funded by all Lenders with a Delayed Draw Term Loan Commitment on or prior to such date does not exceed the Total Delayed Draw Term Loan Commitments.
2.02Notice of Borrowing.  Whenever the Borrower desires to incur a Loan hereunder, it shall give the Administrative Agent at the Notice Office at least three (3) Business Days’ prior notice (which may be telephonic provided a written notice is delivered by the Borrower to the Administrative Agent immediately thereafter); provided that such notice shall be deemed to have been given on a certain day only if given before 12:00 Noon (New York time) on such day.  Such written notice (the “Notice of Borrowing”), except as otherwise expressly provided in Section 2.08, shall be irrevocable and shall be given by the Borrower substantially in the form of Exhibit A, appropriately completed to specify and include:
(a)the aggregate principal amount of such Loan to be incurred pursuant to such Borrowing;
(b)the calculations required to establish whether the Borrower is in compliance with Section 2.01(b);
(c)the date of such Borrowing (which shall be a Business Day);
(d)the initial Interest Period to be applicable thereto in accordance with Section 2.07; and
(e)with respect to an incurrence of a Borrowing of Delayed Draw Term Loans, attaching documentation (including, without limitation, invoices) of the applicable Scrubber Acquisition in connection with such Borrowing and calculations sufficient to show that the aggregate principal amount of Delayed Draw Term Loans requested pursuant to such Borrowing shall constitute not more than 90% of the cost of such Scrubber Acquisition as of the applicable Delayed Draw Funding Date or, if such Borrowing is to be used to reimburse the Borrower or a Subsidiary for amounts previously paid for such applicable Scrubber Acquisition, not more than 90% of the cost thereof.
The Administrative Agent shall promptly (and in no event less than three (3) Business Days prior to the proposed Borrowing Date or Delayed Draw Funding Date) give each Lender notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing.
2.03Disbursement of Funds.  Except as otherwise specifically provided in the immediately succeeding sentence, no later than 12:00 Noon (New York time) on the date specified in the Notice of Borrowing, each Lender will make available its pro rata portion of the Borrowing requested to be made on such date.  All such amounts shall be made available in Dollars and in immediately available funds at the Payment Office of the Administrative Agent and the Administrative

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Agent will make available to the Borrower (on such day to the extent of funds actually received by the Administrative Agent prior to 12:00 Noon (New York time) on such day) at the Payment Office, in the account specified in the Notice of Borrowing, the aggregate of the amounts so made available by the Lenders.  Unless the Administrative Agent shall have been notified by any Lender prior to the applicable Borrowing Date that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of any Borrowing to be made on such Borrowing Date the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such Borrowing Date and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent.  The Administrative Agent shall also be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate and (ii) if recovered from the Borrower, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.06.  For the avoidance of doubt, the Borrower shall be required to make payments pursuant to Section 2.09 if the applicable Delayed Draw Funding Date does not occur. Each Borrowing of Delayed Draw Term Loans shall be in a principal amount of $5,000,000, or a whole multiple of $50,000, in excess thereof.
2.04Notes.  (a)  The Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 11.17 and shall, if requested by such Lender, also be evidenced by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-1 (each, a “Term Note” and, collectively, the “Term Notes”) or Exhibit B-2 (each, a “Delayed Draw Term Note” and, collectively, the “Delayed Draw Term Notes” and, together with the Term Notes, each, a “Note” and collectively, the “Notes”), with blanks appropriately completed in conformity herewith.
(b) Each Note shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the applicable Borrowing Date, (iii) be in a stated principal amount equal to the outstanding amount of such Loan of such Lender and be payable in the outstanding principal amount of such Loan evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as provided in Section 2.06 in respect of such Loan evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.
(c)Each Lender will note on its internal records the amount of any Loan made by it and each payment in respect thereof and will, prior to any transfer of any of its Notes, endorse on the reverse side thereof the outstanding principal amount of such Loan evidenced thereby.  Failure to make any such notation or any error in any such notation or endorsement shall not affect the Borrower’s obligations in respect of such Loan.
(d)Notwithstanding anything to the contrary contained above in this Section 2.04 or elsewhere in this Agreement, Notes shall be delivered only to Lenders that at any time specifically request the delivery of such Notes.  No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay such Loan (and

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all related Credit Document Obligations) incurred by the Borrower that would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the Credit Documents.  Any Lender that does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations on such Note otherwise described in preceding clause (b).  At any time (including, without limitation, to replace any Note that has been destroyed or lost) when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to such Lender the requested Note in the appropriate amount or amounts to evidence such Loan; provided that, in the case of a substitute or replacement Note, the Borrower shall have received from such requesting Lender (i) an affidavit of loss or destruction and (ii) a customary lost/destroyed Note indemnity, in each case in form and substance reasonably acceptable to the Borrower and such requesting Lender, and duly executed by such requesting Lender.
2.05Pro Rata Borrowings.  The Borrowing of the applicable Class of Loans under this Agreement shall be incurred from the Lenders of Initial Term Loans or the Delayed Draw Term Loan Lenders, as the case may be, pro rata on the basis of their Commitments. The obligations of the Lenders hereunder to make the Loans and to make payments pursuant to Section 10.06 are several and not joint. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make any Loan or payments under Section 10.06 hereunder and that each Lender shall be obligated to make any Loan provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans and payments hereunder.
2.06Interest.  (a)  The Borrower agrees to pay interest in respect of the unpaid principal amount of a Loan from the date on which the Administrative Agent shall have received funds from each Lender pursuant to Section 2.03 until the maturity thereof (whether by acceleration or otherwise) at a rate per annum which shall be equal to the sum of the Applicable Margin plus the Eurodollar Rate (the “Interest Rate”) for the relevant Interest Period, each as in effect from time to time.
(b)If the Borrower fails to pay any amount payable by it under a Credit Document on its due date, interest shall accrue on the overdue amount (in the case of overdue interest to the extent permitted by law) from the due date up to the date of actual payment (both before and after judgment) at a rate which is, subject to paragraph (c) below, 2% plus the Interest Rate then applicable to such applicable Loan. Any interest accruing under this Section 2.06(b) shall be immediately payable by the Borrower on demand by the Administrative Agent.
(c)If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to such Loan:
(i)the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to such Loan; and
(ii)the rate of interest applying to the overdue amount during that first Interest Period shall be 2% plus the Interest Rate which would have applied if the overdue amount had not become due.
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

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(d)Accrued and unpaid interest shall be payable (i) in arrears on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three (3) months, on each date occurring at three (3) month intervals after the first day of such Interest Period, and (ii) on any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.
(e)Upon each Interest Determination Date, the Administrative Agent shall determine the Eurodollar Rate for each Interest Period applicable to the Loan made or to be made pursuant to the Borrowing and shall promptly notify the Borrower and the respective Lenders thereof.  Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto.
2.07Interest Periods.  At the time the Borrower gives the Notice of Borrowing in respect of the making of a Loan (in the case of the initial Interest Period applicable thereto) or on the third Business Day prior to the expiration of an Interest Period applicable to such Loan (in the case of any subsequent Interest Period) (provided that such notice shall be deemed to be given on a certain day only if given before 12:00 Noon (New York time)), it shall have the right to elect, by giving the Administrative Agent notice thereof, the interest period (each an “Interest Period”) applicable to such Loan, which Interest Period shall, at the option of the Borrower, be a one (1), three (3) or six (6) month period (or such other period as all the Lenders may agree); provided that:
(i)each portion of such Loan comprising the Borrowing shall at all times have the same Interest Period;
(ii)subject to clause (iii) below, each Interest Period for such Loan after the initial Interest Period with respect thereto shall commence on the day on which the immediately preceding Interest Period applicable thereto expires;
(iii)if any Interest Period relating to such Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;
(iv)if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the first succeeding Business Day; provided, however, that if any Interest Period for such Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;
(v)no Interest Period in respect of a Borrowing of a Loan shall be selected which extends beyond the Maturity Date;
(vi)any Interest Period commencing less than one month prior to the Maturity Date shall end on the Maturity Date;
(vii)if an Event of Default has occurred and is continuing, unless the Required Lenders otherwise agree, the Interest Period shall be three (3) months; and
(viii)no Interest Period shall be selected in respect of a Loan which extends beyond any date upon which a Scheduled Repayment will be required to be made under Section 4.02(a) if the aggregate principal amount of such Loan which has an Interest Period which will expire after

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such date will be in excess of the aggregate principal amount of such Loan then outstanding less the aggregate amount of such repayment.
If upon the expiration of any Interest Period applicable to the Borrowing of a Loan, the Borrower has failed to elect a new Interest Period to be applicable to such Loan as provided above, the Borrower shall be deemed to have elected a three (3) month Interest Period to be applicable to such Loan effective as of the expiration date of such current Interest Period.
2.08Increased Costs, Illegality, Market Disruption, etc.  (a)  In the event that any Lender shall have reasonably determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):
(i)at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to the Loans because of, without duplication, the introduction of or effectiveness of any Change in Law since the Original Closing Date in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy or otherwise or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on any Loan or any other amounts payable hereunder (except for changes in the rate of Tax on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which such Lender or the entity controlling such Lender is organized or in which the principal office of such Lender or the entity controlling such Lender or such Lender’s applicable lending office is located or any subdivision thereof or therein), but without duplication of any amounts payable in respect of Taxes pursuant to Section 4.04, (B) a change in official reserve requirements but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate or (C) a change that will have the effect of increasing the amount of capital adequacy required or requested to be maintained by such Lender, or any corporation controlling such Lender, based on the existence of such Lender’s Commitments hereunder or its obligations hereunder; or
(ii)at any time, that the making or continuance of a Loan has been made unlawful by any law or governmental rule, regulation or order;
then, and in any such event, such Lender shall promptly give notice (by telephone confirmed in writing) to the Borrower and, in the case of clause (ii) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the Lenders).  Thereafter (x) in the case of clause (i) above, the Borrower agrees (to the extent applicable), to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased costs or reductions to such Lender or such other corporation and (y) in the case of clause (ii) above, the Borrower shall take one of the actions specified in Section 2.08(b) as promptly as possible and, in any event, within the time period required by law.  In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable; provided that such Lender’s determination of compensation owing under this Section 2.08(a) shall, absent manifest error (but subject to Section 2.10 (to the extent applicable)), be final and conclusive and binding on all the parties hereto.  Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.08(a), will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis for the

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calculation of such additional amounts; provided that, subject to the provisions of Section 2.10(b), the failure to give such notice shall not relieve the Borrower from its obligations hereunder.
(b)At any time that any Loan is affected by the circumstances described in Section 2.08(a)(i), the Borrower may, and in the case of any Loan is affected by the circumstances described in Section 2.08(a)(ii), the Borrower shall, either (x) if the affected Loan is then being made initially, cancel the respective Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date or the next Business Day that the Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.08(a)(i) or (ii) or (y) if the affected Loan is then outstanding, upon at least three (3) Business Days’ written notice to the Administrative Agent repay (within the time period required by the applicable law or governmental rule, governmental regulation or governmental order) the affected Loan in full in accordance with the applicable requirements of Section 4.02; provided that if more than one Lender is affected at any time in the same manner and to the same extent, then all affected Lenders must be treated the same pursuant to this Section 2.08(b).
(c)If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of such Loan for the relevant Interest Period shall be the rate per annum which is the sum of:
(i)the Applicable Margin; and
(ii)the rate determined by each Lender and notified to the Administrative Agent, which expresses the actual cost to each such Lender of funding its participation in such Loan for a period equivalent to such Interest Period from whatever source it may reasonably select.
(d)If a Market Disruption Event occurs and the Administrative Agent or the Borrower so require, the Administrative Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest. Any alternative basis agreed pursuant to the immediately preceding sentence shall, with the prior consent of all the Lenders and the Borrower, be binding on all parties. If no agreement is reached pursuant to this clause (d), the rate provided for in clause (c) above shall apply for the entire Interest Period.
(e)If any Reference Bank ceases to be a Lender under this Agreement, (x) it shall cease to be a Reference Bank and (y) the Administrative Agent shall, with the approval (which shall not be unreasonably withheld) of the Borrower, nominate as soon as reasonably practicable another Lender to be a Reference Bank in place of such Reference Bank.
(f)The Administrative Agent may not disclose to any Lender any details of the rate notified to the Administrative Agent by any other Lender acting as a Reference Bank for the purposes of Section 2.08(c) or (d).
2.09Compensation.  The Borrower agrees to compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation; provided that no Lender shall be required to disclose any information that would be confidential or price sensitive), for all reasonable and documented losses, expenses and liabilities (including, without limitation, any such loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its share of a Loan but excluding any loss of anticipated profits) which such Lender may sustain in respect of such  Loan made to the Borrower: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of such Loan does not occur on the applicable Borrowing

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Date (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.08(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 2.08(a), Section 4.01 or Section 4.02 or as a result of an acceleration of such Loan pursuant to Section 9) of any of its share of the Loan, or assignment of its share of such Loan pursuant to Section 2.11, occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its share of such Loan is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of any other Default or Event of Default arising as a result of the Borrower’s failure to repay such Loan or make payment on any Note held by such Lender when required by the terms of this Agreement.
2.10Change of Lending Office; Limitation on Additional Amounts.  (a)  Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.08(a), Section 2.08(b) or Section 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable good faith efforts (subject to overall policy considerations of such Lender) to designate another lending office for a Loan affected by such event; provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage (other than any such disadvantage the cost of which is reimbursed by the Borrower), with the object of avoiding the consequence of the event giving rise to the operation of such Section.  Nothing in this Section 2.10 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender provided in Sections 2.08 and 4.04.
(b)Failure or delay on the part of any Lender to demand compensation pursuant to Sections 2.08, 2.10 or 4.04 of this Agreement shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof). This Section 2.10(b) shall have no applicability to any Section of this Agreement other than said Sections 2.08, 2.09 and 4.04.
2.11Replacement of Lenders.  (x) If any Lender becomes a Defaulting Lender, (y) upon the occurrence of any event giving rise to the operation of Section 2.08(a), Section 2.08(b) or Section 4.04 with respect to any Lender which results in such Lender charging to the Borrower increased costs materially in excess of those being generally charged by the other Lenders or (z) as provided in Section 11.13(b) in the case of certain refusals by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders, the Borrower shall have the right, if no Default or Event of Default will exist immediately after giving effect to the respective replacement, to replace such Lender (the “Replaced Lender”) with one or more other Eligible Transferee or Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) reasonably acceptable to the Administrative Agent; provided that:
(i)at the time of any replacement pursuant to this Section 2.11, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding amount of the Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum (without duplication) of (x) an amount equal to the amount of principal of, and all accrued

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interest on, the outstanding Loan of the Replaced Lender and (y) an amount equal to all accrued, but unpaid, Commitment Commission owing to the Replaced Lender pursuant to Section 3.01;
(ii)such assignment does not conflict with applicable law; and
(iii)all obligations of the Borrower due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.
Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.11, the Administrative Agent shall be entitled (but not obligated) and is authorized (which authorization (x) is coupled with an interest and (y) shall only arise to the extent the Replaced Lender has not executed the Assignment and Assumption Agreement within 10 Business Days after written request therefor) to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.11 and Section 11.04.  Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to (i) the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.08, 2.09, 4.04, 11.01 and 11.06), which shall survive as to such Replaced Lender.
SECTION 3Commitment Commission; Fees; Reductions of Commitment.
3.01Commitment Commission; Fees. (a) The Borrower agrees to pay the Administrative Agent for distribution to each Non-Defaulting Lender a commitment commission (the “Commitment Commission”) for the period from the Restatement Effective Date to and including the Delayed Draw Funding Date computed at a per annum rate equal to 35% of the Applicable Margin of the daily Unutilized Commitment, in each case, of such Non-Defaulting Lender. Accrued Commitment Commission shall be due and payable in arrears on each Payment Date and on the Delayed Draw Termination Date (or, if earlier, the date upon which the Total Commitments are terminated).
(b)The Borrower shall pay (i) the fees set forth in the Fee Letters at the times set forth therein and (ii) to the Administrative Agent, for the Administrative Agent’s own account, such other fees as have been agreed to in writing by the Borrower and the Administrative Agent (the fees set forth in this Section 3.01(b), collectively, the “Fees”).
3.02Voluntary Reduction of Commitments.
(a)Upon at least three Business Days’ prior written notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time, without premium or penalty, to terminate or reduce the Total Commitment or the Total Delayed Draw Commitments, as applicable, in whole or in part prior to the Delayed Draw Termination Date, in integral multiples of $1,000,000 in the case of partial reductions to the Total Commitments; provided that, in each case, such reduction shall apply proportionately to permanently reduce the Commitment, as applicable, of each Lender.
(b)In the event of certain refusals by a Lender as provided in Section 11.13(b) to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement

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which have been approved by the Required Lenders, the Borrower may, subject to the requirements of said Section 11.13(b) and upon five Business Days’ written notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), terminate all of the Commitments (if any) of such Lender so long as any Loan, together with accrued and unpaid interest, Commitment Commission and all other amounts, owing to such Lender are repaid concurrently with the effectiveness of such termination (at which time Schedule I-A hereto shall be deemed modified to reflect such changed amounts), and at such time such Lender shall no longer constitute a “Lender” for purposes of this Agreement, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18), which shall survive as to such repaid Lender.
3.03Mandatory Reduction of Commitments.
(a)(i) The Initial Term Loan Commitment of each Lender terminated in its entirety on the Original Closing Date (after having given effect to the incurrence by the Borrower of Initial Term Loans on such date) and (ii) the undrawn Delayed Draw Term Loan Commitment of each Delayed Draw Term Loan Lender shall terminate in its entirety on the Delayed Draw Termination Date.
(b)[Reserved].
SECTION 4Prepayments; Payments; Taxes.
4.01Voluntary Prepayments.  (a)  The Borrower shall have the right to prepay any Class of Loans, without premium or penalty, in whole or in part at any time and from time to time on the following terms and conditions:
(i)the Borrower shall give the Administrative Agent, prior to 12:00 Noon (New York time) at its Notice Office, at least three (3) Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay such Loans, which notice shall specify the amount of such prepayment and the specific Borrowing or Borrowings pursuant to which such Loans were made, which notice the Administrative Agent shall promptly transmit to each of the Lenders;
(ii)each partial prepayment of the Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $1,000,000 (or such lesser amount as is acceptable to the Administrative Agent in any given case) or integral multiples of $1,000,000;
(iii)at the time of any prepayment of the Loans pursuant to this Section 4.01 which occurs on any date other than the last day of the Interest Period applicable thereto, the Borrower shall pay the amounts required pursuant to Section 2.09;
(iv)except as expressly provided in clause (v) below, each prepayment pursuant to this Section 4.01 in respect of the Loans made pursuant to a Borrowing shall be applied to reduce future Scheduled Repayments for each Payment Date (including the final installment amount due on the Maturity Date) related to such Class of Loans in accordance with the remaining outstanding principal amounts of such installments in direct order of maturity of such Loan; and
(v)in the event of a refusal by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 11.13(b), the Borrower may, upon five (5) Business Days’ prior written notice to the Administrative Agent at the Notice Office

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(which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay such Loan, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender in accordance with, and subject to the requirements of, said Section 11.13(b) so long as (I) all applicable Commitments of such Lender are terminated concurrently with such repayment pursuant to Section 4.02(f) (at which time Schedule I-A or Schedule I-B, as applicable,  hereto shall be deemed modified to reflect the changed Commitments) and (II) the consents, if any, required under Section 11.13(b) in connection with the repayment pursuant to this clause (a) have been obtained except that to the extent such Lender has been replaced by a Replacement Lender, the Total Commitment shall not be reduced.
(b)Loans prepaid pursuant to this Section 4.01 may not be reborrowed.
4.02Mandatory Repayments.
(a)(i) In addition to any other mandatory repayments pursuant to this Section 4.02, the Borrower shall be required to repay the Initial Term Loans or Delayed Draw Term Loans, as applicable, on each Payment Date (including for the avoidance of doubt, the Maturity Date) in an amount equal to the Scheduled Repayment for such Payment Date, as set forth in Schedules X-1 and X-2, as applicable. The initial Payment Date for Scheduled Repayments of Initial Term Loans was December 31, 2018 and the initial Payment Date for Scheduled Repayments of Delayed Draw Term Loans shall be on March 31, 2020.
(ii)The Scheduled Repayments of the Delayed Draw Term Loans shall be adjusted and Schedule X-2 shall be amended, modified, supplemented and/or replaced by the Administrative Agent on the Delayed Draw Termination Date to reflect the outstanding principal amount of Delayed Draw Term Loans as of the Delayed Draw Termination Date, after giving effect to the termination of any undrawn Delayed Draw Term Loan Commitments on such date pursuant to Section 3.03.
(iii)The Scheduled Repayments of the Initial Term Loans shall be adjusted and Schedule X-1 shall be amended, modified, supplemented and/or replaced by the Administrative Agent, in each case, at the Borrower’s option, (i) in connection with any mandatory repayment or substitution of a Collateral Vessel with a Replacement Vessel, in each case, made in connection with Section 4.02(b), and (ii) to give effect to any reduction to the Amortization Amounts set forth therein in accordance with Sections 4.01(a)(iv) and 4.02(f) and (iii) at the end of the Specified Exchange Period; provided that, if the adjustment to the Scheduled Repayments of the outstanding Initial Term Loans or the amendment, modification, supplement and/or replacement of Schedule X-1 would result in a quarterly Amortization Amount reflecting an amount that is less than an amount, paid quarterly, such that the outstanding Initial Term Loans are repaid to $0 when the average age of the Collateral Vessels owned by the Obligors reaches 17 years of age (each such higher amount, the “Minimum Repayment Profile”), then the Borrower shall be deemed to have made an election to adjust the Scheduled Repayments relating to the outstanding Initial Term Loans and amend, modify, supplement and/or replace Schedule X-1 to reflect the applicable Minimum Repayment Profile relating to the outstanding Initial Term Loans.
(b)(i) In addition to any other mandatory repayments of the Loans and reductions of Commitments required pursuant to this Section 4.02, but without duplication, on (x) the date of any Collateral Disposition (other than a Collateral Disposition constituting an Event of Loss) involving a Collateral Vessel (other than any Additional Vessels or, for the avoidance of doubt, Specified Exchange Collateral Vessels) and (y) the earlier of (I) the date which is 120 days following any Collateral Disposition constituting an Event of Loss involving a Collateral Vessel (other than an Additional Vessel) and (II) the date of receipt by the Borrower, any of its Subsidiaries or the Administrative Agent of the insurance proceeds relating to such Event of Loss (the date described in (x) or (y), the “Collateral

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Disposition Prepayment Date”), the Borrower shall repay the Loans on a pro rata basis in an amount equal to the Collateral Disposition Prepayment Amount, as such Collateral Disposition Prepayment Amount may be reduced in accordance with clauses (ii) through (vi) of this Section 4.02(b).
(ii)Notwithstanding anything to the contrary set forth in clause (b)(i), above, no repayment pursuant to Section 4.02(b)(i) will be required to be made if all of the following conditions are met:
(1)the Collateral Disposition Prepayment Amount shall have been deposited as cash collateral with the Security Agent on the Collateral Disposition Prepayment Date in an account at the Administrative Agent (each such account a “Cash Collateral Account”) pursuant to an account pledge agreement on substantially the same terms as those set forth in the Pledge Agreement and subject to a control agreement which shall be a “blocked” control agreement;
(2)within 360 days after the Collateral Disposition Prepayment Date (such 360-day period, the “Reinvestment Period”), one or more Replacement Vessels meeting the requirements of the definition thereof have become Collateral Vessel(s) under this Agreement and all Collateral and Guaranty Requirements in connection with any such Replacement Vessel and the Subsidiary of the Borrower which owns such Replacement Vessel have been satisfied; and
(3) [reserved]; and
(3)(4) the Borrower is in pro forma compliance with the Collateral Maintenance Test after giving effect to any Replacement Vessel becoming a Collateral Vessel.
(iii)In connection with any Replacement Vessel becoming a Collateral Vessel as described in Section 4.02(b)(ii)(2) above, the Borrower shall be entitled to use the funds on deposit in the Cash Collateral Account totoward purchase of such Replacement Vessel or to reimburse itself for (or refinance any indebtedness relating to) any previously acquired Replacement Vessel.  The funds will be released to the Borrower (1) in an amount equal to the lesser of (x) the amount then on deposit in the Cash Collateral Account and (y) 50% of the Appraised Value of the Replacement Vessel, (2) no earlier than the date on which such Replacement Vessel is to become a Collateral Vessel and all Collateral and Guaranty Requirements in connection with any such Replacement Vessel and the Subsidiary of the Borrower which owns such Replacement Vessel are to be satisfied and (3) otherwise pursuant to a mechanic reasonably acceptable to the Administrative Agent.
(iv)If all or any portion of such Collateral Disposition Prepayment Amount is not released to the Borrower pursuant to clause (iii) above within the Reinvestment Period, the amount in the Cash Collateral Account shall be applied on the first Business Day following the Reinvestment Period as a mandatory prepayment pursuant to this Section 4.02(b).
(v)Schedules X-1 and X-2 shall be amended by the Administrative Agent as of the last day of the Reinvestment Period to reflect a recalculated Amortization Amount based on the outstanding Loans as of such date and Collateral Vessels owned by the Obligors as of such date in accordance with, and to the extent required by, the requirements of Section 4.02(a)(iii).
(vi)For the avoidance of doubt, and without duplication of any repayment pursuant to Section 4.02(c), on any date on which the Borrower is required to make a repayment in connection with a Collateral Disposition under this clause (b), if after giving effect to such repayment the Borrower is or would not be in pro forma compliance with the Financial Covenant set forth in Section 8.07(d) (based on the most recent Appraisals delivered to the Administrative Agent under Section 5.02(d) or

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7.01(d)), the Borrower shall be required to post Additional Collateral or make an additional repayment in an amount sufficient to cure such non-compliance in accordance with the provisions of Section 8.07(d).
(vii)The reinvestment provisions set forth in Section 4.02(b)(ii) and (iii) may only be exercised by the Borrower in connection with up to 1617 Collateral Dispositions (including, for the avoidance of doubt, the Collateral Disposition of the Genco Cavalier).
(c)In addition to any other mandatory repayments of the Loans and reductions of Commitments required pursuant to this Section 4.02, upon the occurrence of an Event of Default resulting from a failure by the Borrower to provide Additional Collateral or a repayment of the Loans to cure a breach of Section 8.07(d), the Borrower shall be required to immediately repay the Loans in an amount sufficient to comply with Section 8.07(d); provided that it is understood and agreed that the requirement to repay Loans under this Section 4.02(c) shall not be deemed to be a waiver of any other right or remedy that any Secured Creditor may have as a result of an Event of Default resulting from a breach of Section 8.07(d).
(d)If, in any applicable jurisdiction, it becomes impossible or unlawful for any Lender or its affiliates to perform any of its obligations as contemplated in relation to the Credit Facility or to fund or maintain its participation in the Loans, such Lender’s Unutilized Commitment shall be immediately reduced and cancelled and the Loans attributable to such Lender shall be immediately due and payable.
(e)All repayments of the Loans and reductions of Commitments pursuant to Sections 4.01 and 4.02 (other than Section 4.02(d)) shall be (i) unless a Class or Borrowing of Loans is specified by the Borrower in accordance with Section 4.01(a), applied on a pro rata basis among the outstanding Initial Term Loans and the Delayed Draw Outstanding Amount to (x) the repayment of the outstanding Initial Term Loans and (y) the reduction and/or repayment of the Delayed Draw Outstanding Amount, as applicable, and (ii) applied (x) with respect to the Initial Term Loans, to the repayment of the portion of the outstanding Initial Term Loans held by each Lender in accordance with its Pro Rata Share and (y) with respect to the Delayed Draw Outstanding Amount, to the reduction and/or repayment of the Delayed Draw Outstanding Amount, as applicable, held by each Delayed Draw Term Loan Lender in accordance with its Pro Rata Share.
(f)The amount of all repayments of the Loans and reductions of Commitments pursuant to Sections 4.02(b) and 4.02(c) shall be applied (i) in the case of Initial Term Loans, to reduce the then remaining Scheduled Repayments of the Initial Term Loans (including the Scheduled Repayment due on the Maturity Date) on a pro rata basis and (ii) in the case of the Delayed Draw Outstanding Amount, first to permanently reduce and cancel the aggregate amount of all undrawn Delayed Draw Term Loan Commitments of each Delayed Draw Term Loan Lender on a pro rata basis in accordance with its Pro Rata Share and second, once the aggregate amount of undrawn Delayed Draw Term Loan Commitments has been permanently reduced and canceled to $0, to reduce the then remaining Scheduled Repayments of the Delayed Drawn Term Loans (including the Scheduled Repayment due on the Maturity Date) on a pro rata basis. For the avoidance of doubt, the Borrower may retain the portion of the amount of the repayment which has been applied pursuant to this Section 4.02(f) to permanently reduce and cancel undrawn Delayed Draw Term Loan Commitments.
(g)With respect to each repayment of the Loans under Section 4.01 or required by this Section 4.02, the Borrower may designate the specific Borrowing or Borrowings pursuant to which such Loan was made; provided that (i) each Borrowing of the Loans with Interest Periods ending on such date of required repayment shall be paid in full prior to the payment of any other Borrowing of the Loans and (ii) each repayment of any Borrowing of the Loans shall be applied pro rata among such Borrowing.

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In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the preceding provisions of this clause (g), make such designation in its sole reasonable discretion with a view, but no obligation, to minimize breakage costs owing pursuant to Section 2.09.
(h)Notwithstanding anything to the contrary contained elsewhere in this Agreement, all of the outstanding Loan shall be repaid in full on the Maturity Date.
(i)Repayments of the Loans pursuant to Section 4.01 and this Section 4.02 may not be reborrowed.
4.03Method and Place of Payment.  Except as otherwise specifically provided herein, all payments under this Agreement or any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office of the Administrative Agent or such other office in the State of New York as the Administrative Agent may hereafter designate in writing.  Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.
4.04Net Payments; Taxes.  (a)  All payments made by any Obligor hereunder or under any Note will be made without setoff, counterclaim or other defense.  All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law.  If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Note, then:
(i)the applicable Obligor shall be entitled to make such deduction or withholding;
(ii)the applicable Obligor shall pay the full amount deducted or withheld to the relevant Governmental Authority; and
(iii)in the case of any Indemnified Taxes, the applicable Obligor agrees to pay the full amount of such Indemnified Taxes and Other Taxes, and such additional amounts as may be necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
If any amounts are payable in respect of Indemnified Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each Lender, within 10 days after the written request of such Lender, for Taxes imposed on or measured by the net income of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or Governmental Authority of any such jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located and for any withholding of Taxes as such Lender shall determine are payable by, or withheld from, such Lender, in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes

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(including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. The Borrower will furnish to the Administrative Agent within 45 days after the date of payment of any Indemnified Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower.
(b)Without duplicating the payments under clause (a) above, the Borrower agrees to timely pay to the relevant Governmental Authority any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Note excluding (i) such amounts imposed in connection with an Assignment and Assumption Agreement, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Note, except to the extent that any such change is requested in writing by the Borrower and (ii) the registration or presentation of a Note that is mandatorily required by law (all such non-excluded Taxes described in this Section 4.04(b) being referred to as “Other Taxes”).
(c)Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(d)If the Administrative Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes as to which it has been indemnified by an Obligor or with respect to which such Obligor has paid additional amounts pursuant to Section 4.04(a), it shall pay over such refund to such Obligor (but only to the extent of indemnity payments made, or additional amounts paid, by such Obligor under Section 4.04(a) with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Administrative Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  In the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority, then such Obligor, upon the written request of the Administrative Agent or such Lender, agrees to repay within 30 days the amount paid over to such Obligor (without any penalties, interest or other charges other than any penalties, interest or charges imposed by the relevant Governmental Authority) to the Administrative

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Agent or such Lender.  Nothing in this Section 4.04(d) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).
(e)If a payment made to a Lender under any Note would be subject to withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (e), if any applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable upon the Note, including any Taxes imposed under FATCA, the Administrative Agent shall be entitled to make deductions or withholding. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f)Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.04(a) relating to the maintenance of a Participant Register and (iii) any Taxes excluded in Section 4.04(a) attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Note, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Note or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (f).
(g)        Each party’s obligations under this Section 4.04 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.
4.05Application of Proceeds.  (a) All monies collected by the Security Agent upon any sale or other disposition of the Collateral and all proceeds thereof of each Obligor, together with all other monies received by the Administrative Agent or Security Agent under and in accordance with this Agreement and the other Credit Documents (except to the extent (i) such monies are for the account of the Administrative Agent or Security Agent only or (ii) released in accordance with the applicable provisions of this Agreement or any other Credit Document) or with respect to any distribution during a Bankruptcy Proceeding, shall be applied to the payment of the Secured Obligations in accordance as follows:
(i)first, to the payment of all amounts owing the Security Agent of the type described in clauses (c) and (d) of the definition of “Secured Obligations”;

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(ii)second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Credit Document Obligations shall be paid to the Lenders as provided in Section 4.05(d) hereof, with each Lender receiving an amount equal to such outstanding Credit Document Obligations or, if the proceeds are insufficient to pay in full all such Credit Document Obligations, its Pro Rata Share of the amount remaining to be distributed;
(iii)third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Other Obligations under Secured Credit Agreement Hedging Agreements shall be paid to the Other Creditors as provided in Section 4.05(d) hereof, with each Other Creditor receiving an amount equal to such outstanding Other Obligations under Secured Credit Agreement Hedging Agreements to which it is a party or, if the proceeds are insufficient to pay in full all such Other Obligations, its Pro Rata Share of the amount remaining to be distributed;
(iv)fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i), (ii) and (iii), an amount equal to the outstanding Other Obligations under Secured Other Hedging Agreements shall be paid to the Other Creditors as provided in Section 4.05(d) hereof, with each Other Creditor receiving an amount equal to such outstanding Other Obligations under Secured Other Hedging Agreements to which it is a party or, if the proceeds are insufficient to pay in full all such Other Obligations, its Pro Rata Share of the amount remaining to be distributed;
(v)fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, and following the termination of this Agreement and the Credit Documents in accordance with their terms, to the relevant Obligor or to whomever may be lawfully entitled to receive such surplus.
(b)For purposes of this Agreement, “Pro Rata Share” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Credit Document Obligations or applicable Other Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Credit Document Obligations or applicable Other Obligations, as the case may be.
(c)When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 4.05 only) (i) first, to their Credit Document Obligations, (ii) second, to their Other Obligations under Secured Credit Agreement Hedging Agreements and (iii) third, to their Other Obligations under Secured Other Hedging Agreements.  If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Credit Document Obligations or applicable Other Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

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(d)All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent under this Agreement for the account of the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.
(e)For purposes of applying payments received in accordance with this Section 4.05, the Security Agent shall be entitled to rely upon (i) the Administrative Agent under this Agreement and (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Security Agent) of the outstanding Credit Document Obligations and applicable Other Obligations owed to the Lender Creditors or the Other Creditors, as the case may be.  Unless it has received a notification in writing from the Borrower and the relevant Other Creditor designating the Secured Hedging Agreements of such Other Creditor as a “Secured Hedging Agreement” hereunder and identifying whether it is a “Secured Credit Agreement Hedging Agreement” or “Secured Other Credit Agreement” hereunder, the Security Agent, shall be entitled to assume that no Secured Hedging Agreements are in existence.
(f)It is understood and agreed that each Obligor shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral pledged and Liens granted by it under and pursuant to the Security Documents and the aggregate amount of the Secured Obligations of such Obligor.
SECTION 5Conditions Precedent.
5.01Original Closing Date.  This Agreement shall become effective on the date on which each of the following conditions is satisfied:
(a)Credit Agreement.  The Borrower, the Administrative Agent and each of the Lenders who are initially parties hereto shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered the same to the Administrative Agent.
(b)PATRIOT Act; Beneficial Ownership Certification. (i) The Obligors shall have provided, or procured the supply of, the “know your customer” information required pursuant to the PATRIOT Act, to each of the Lenders and the Administrative Agent in connection with their respective internal compliance regulations thereunder or other information requested by any Lender or the Administrative Agent to satisfy related checks under all applicable laws and regulations pursuant to the transactions contemplated hereby, in each case to the extent requested by any Lender or the Administrative Agent not later than three (3) days prior to the Original Closing Date.
(ii)The Borrower shall have delivered a Beneficial Ownership Certification to the Administrative Agent not later than three (3) days prior to the Original Closing Date.
5.02Conditions to the Initial Borrowing Date.  The obligation of each Lender to make the Initial Term Loan available to the Borrower on the Initial Borrowing Date is subject to the satisfaction of each of the following conditions:
(a)Closing Date; Existing Credit Agreements.  On or prior to the Initial Borrowing Date, (i) the Original Closing Date shall have occurred, (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same a Note executed by

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the Borrower in accordance with Section 2.04 and (iii) the Initial Borrowing Date Refinancing shall have occurred substantially contemporaneously with the funding of the Initial Term Loan hereunder.
(b)Collateral and Guaranty Requirements.  On or prior to the Initial Borrowing Date, the Collateral and Guaranty Requirements with respect to each Obligor and each Collateral Vessel shall be satisfied.
(c)Officer’s Certificates.  The Administrative Agent shall have received a certificate in form and substance reasonably acceptable to the Administrative Agent signed by an Authorized Officer of the Borrower, with appropriate insertions, together with copies of the Organizational Documents of the Borrower and the resolutions of the Borrower referred to in such certificate authorizing the consummation of the Transaction and certifying that the conditions set forth in Sections 5.02(b), (e), (f), (k), (l), (m), (n) and (o) are satisfied (to the extent that, in each case, such conditions are not required to be acceptable (reasonably or otherwise) to the Administrative Agent).
(d)Appraisals.  The Administrative Agent shall have received Appraisals not older than thirty (30) days (from the Original Closing Date) from two Approved Appraisers in acceptable scope, form and substance, stating the then current fair market value of the Collateral Vessels on an individual charter-free basis.
(e)Material Adverse Effect.  Since December 31, 2017, nothing shall have occurred (and neither the Administrative Agent nor any of the Lenders shall have become aware of any condition or circumstance not previously known to it or them) which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect.
(f)Litigation.  No litigation by any entity (private or governmental) shall be pending or threatened with respect to any Obligor or any of its Subsidiaries which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect.
(g)Legal Opinions.  The Administrative Agent shall have received, on behalf of itself and the Lenders, the following legal opinions:
(i)special New York counsel to the Borrower and the Obligors (which shall be Kramer Levin Naftalis & Frankel LLP or another New York law firm reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Initial Borrowing Date;
(ii)special Republic of the Marshall Islands counsel to each of the Obligors (which shall be Reeder & Simpson, P.C. or another law firm qualified to render an opinion as to the Republic of the Marshall Islands law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Initial Borrowing Date,
(iii)special Liberian counsel to each of the Obligors whose Collateral Vessels are flagged in Liberia (which shall be Poles, Tublin, Stratakis & Gonzalez LLP or another law firm qualified to render an opinion as to Liberian law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Initial Borrowing Date,

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(iv)special Hong Kong counsel to the Administrative Agent (which shall be Ince & Co. or another law firm qualified to render an opinion as to Hong Kong law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Initial Borrowing Date, and
(v)if applicable, counsel to each of the Obligors in the jurisdiction of the flag of such Collateral Vessel (other than the Marshall Islands, Liberia and Hong Kong, which are covered by opinions in clause (ii), (iii) and (iv) respectively), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Initial Borrowing Date for such Collateral Vessel covering such matters as shall be required by the Administrative Agent
in each case which shall be in form and substance reasonably acceptable to the Lenders;
(h)Corporate Documentation.  The Administrative Agent shall have received copies of the Organizational Documents of each Subsidiary Guarantor. To the extent not previously delivered, the Administrative Agent shall have received (i) a certificate, dated the Initial Borrowing Date and reasonably acceptable to the Administrative Agent, signed by an Authorized Officer of each Obligor with appropriate insertions, together with copies of the Organizational Documents of such Obligor and the resolutions of such Obligor referred to in such certificate authorizing the consummation of the Transaction and (ii) copies of governmental approvals (if any) and good standing certificates which the Administrative Agent may have reasonably requested in connection therewith.
(i)Fees.  All fees and all other reasonable fees and documented out-of-pocket costs and expenses (including, without limitation, the reasonable legal fees and expenses of White & Case LLP and other local counsel to the Administrative Agent) and other compensation due and payable on or prior to the Initial Borrowing Date, in each case, payable to the Administrative Agent, the Security Agent, the Lead Arrangers and the Lenders in respect of the transactions contemplated by this Agreement to the extent reasonably invoiced at least two (2) Business Days prior to the Initial Borrowing Date.
(j)Solvency Certificate.  The Borrower shall cause to be delivered to the Administrative Agent a solvency certificate from an Authorized Officer of the Borrower, substantially in the form of Exhibit L, which shall be addressed to the Administrative Agent and dated as of the Initial Borrowing Date, setting forth the conclusion that, after giving effect to the Transaction and the incurrence of the Initial Term Loan, each Obligor individually (after giving effect to rights of contribution and subrogation) and the Borrower and its Subsidiaries taken as a whole, are not insolvent and will not be rendered insolvent by the incurrence of such indebtedness, and will not be left with unreasonably small capital with which to engage in its business and will not have incurred debts beyond its ability to pay such debts as they become due.
(k)Approvals.  All necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Transaction, the Initial Term Loan, and the granting of Liens under the Credit Documents shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which, in the reasonable judgment of the Administrative Agent, restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the making of the Initial Term Loan and the performance by the Obligors of the Credit Documents.  In addition, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the consummation of the Transaction, the making of the Initial Term Loan or the performance by the Obligors of the Credit Documents.

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(l)No Conflicts.  On the Initial Borrowing Date, after giving effect to the consummation of the Transaction, the making of the Initial Term Loan and the performance by the Obligors of the Credit Documents, the financings incurred in connection therewith and the other trans­actions contemplated hereby, there shall be no conflict with, or default under any material agreement to which the Borrower or any Subsidiary Guarantor is a party.
(m)Outstanding Indebtedness.  On the Initial Borrowing Date, after giving effect to the consummation of the Transactions, the Borrower and its Subsidiaries shall have no outstanding Financial Indebtedness or Contingent Obligations except for those arising under the Credit Documents and those set forth on Schedule VIII.
(n)Representations and Warranties.  Before and after giving effect to the Initial Term Loan being incurred on the Initial Borrowing Date, all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects both before and after giving effect to the Initial Term Loan with the same effect as though such representations and warranties had been made on the date of the Initial Term Loan (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).
(o)No Default or Event of Default.  No Default or Event of Default shall have occurred and be continuing, or would result from the Initial Term Loan being incurred on the Initial Borrowing Date.
(p)Borrowing Notice.  The Administrative Agent shall have received a Notice of Borrowing as required by Section 2.02.
5.03Conditions to Delayed Draw Term Loans.  The obligation of each Lender with a Delayed Draw Term Loan Commitment to make a Delayed Draw Term Loan hereunder on a Delayed Draw Funding Date is subject to satisfaction or waiver of the following conditions:
(a)Notice. The Administrative Agent shall have received a Notice of Borrowing as required by Section 2.02.
(b)No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing, or would result from the incurrence of any Delayed Draw Term Loan on the applicable Delayed Draw Funding Date.
(c)Representations and Warranties. Before and after giving effect to the Delayed Draw Term Loans being incurred on the Delayed Draw Funding Date, all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects both before and after giving effect to the Delayed Draw Term Loans with the same effect as though such representations and warranties had been made on the date of the Delayed Draw Term Loans (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).
(d)Fees. The Administrative Agent and Lenders shall have received all fees payable pursuant to Section 3.01.
(e)Restatement Effective Date; Notes.  On or prior to a Delayed Draw Funding Date, (i) the Restatement Effective Date shall have occurred and (ii) there shall have been delivered to

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the Administrative Agent for the account of each of the Lenders that has requested same a Note executed by the Borrower in accordance with Section 2.04.
The acceptance of the benefits of the Loans shall constitute a representation and warranty by the Borrower to the Administrative Agent and each of the Lenders that all of the applicable conditions specified in this Section 5 and applicable to such Borrowing have been satisfied or waived as of that time.  All of the applicable Notes, certificates, legal opinions and other documents and papers referred to in Section 5, unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders.
SECTION 6Representations and Warranties.  In order to induce the Lenders to enter into this Agreement and to make the Loans, the Borrower makes the following representations and warranties, after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans, with the borrowing of a Loan on or after the Restatement Effective Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Restatement Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date):
6.01Corporate/Limited Liability Company/Limited Partnership Status.  Each of the Borrower and the Subsidiary Guarantors (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and (ii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.02Corporate Power and Authority.  Each of the Borrower and the Subsidiary Guarantors has the corporate or other applicable power and authority to (i) own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage and (ii) execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken or will take in due course all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Credit Documents.
6.03Title; Maintenance of Properties.  Except as permitted by Section 8.01, each Obligor has good and indefeasible title to all properties owned by it, free and clear of all Liens, other than Permitted Liens.
6.04Legal Validity and Enforceability.
(a)Each Obligor has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes the legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(b)After the execution and delivery thereof and upon the taking of the actions mentioned in the immediately succeeding sentence, each of the Security Documents creates in favor of the Security Agent for the benefit of the Secured Creditors a legal, valid and enforceable fully perfected first priority security interest in and Lien on all right, title and interest of the Obligors party thereto in the

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Collateral described therein, subject only to Permitted Liens.  Subject to Sections 5.02(b) and 6.06, no filings or recordings are required in order to perfect the security interests created under any Security Document or to ensure the legality, validity, enforceability or admissibility in evidence of any Credit Document; except for filings or recordings which shall have been made on or prior to the Restatement Effective Date.
(c)Each of the Credit Documents is or, when executed will be, in proper legal form under the laws of the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction for the enforcement thereof under such laws, subject only to such matters which may affect enforceability arising under the law of the State of New York.  To ensure the legality, validity, enforceability or admissibility in evidence of each such Credit Document in the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction, it is not necessary that any Credit Document or any other document be filed or recorded with any court or other authority in the applicable Acceptable Flag Jurisdiction, except as have been made, or will be made, on or prior to the Restatement Effective Date.
(d)None of the Obligors has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made on or prior to the Initial Borrowing Date.
6.05No Violation.  Neither the execution, delivery or performance by any Obligor of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will (i) contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality, (ii) violate, conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except Permitted Liens) upon any of the material properties or assets of the Borrower and its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which any of the Borrower and its Subsidiaries is a party or by which it or any of its material property or assets is bound or to which it may be subject or (iii) violate any provision of the Organizational Documents of any of the Borrower and its Subsidiaries.
6.06Governmental Approvals.
(a)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any Governmental Authority or public body, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance by any Obligor of any Credit Document to which it is a party or (ii) the legality, validity, binding effect or enforceability of any Credit Document to which it is a party, in each case, except (x) as have been obtained or made or (y) filings or other requisite actions necessary to perfect or establish the priority of the Liens created under the Security Documents.
(b)No fees or Taxes, including, without limitation, stamp, transaction, registration or similar Taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Credit Documents other than recording and filing fees and/or Taxes which have been, or will be, paid as and to the extent due.  Under the laws of the Republic of the Marshall Islands, the choice of the laws of the State of New York as set forth in the Credit Documents which are stated to be governed by the laws of the State of New York is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such

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Obligor of an agent for service of process, in each case as set forth in such Credit Documents, is legal, valid, binding and effective.
6.07Balance Sheets; Financial Condition; Undisclosed Liabilities.
(a)(i) The audited consolidated balance sheet of the Borrower and its Subsidiaries at December 31, 2017 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the fiscal year ended on December 31, 2017 in each case furnished to the Lenders prior to the Original Closing Date, present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries at the date of said financial statements and the results for the respective periods covered thereby and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries at March 31, 2018 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the three-month period ended on such date, furnished to the Lenders prior to the Original Closing Date, present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries at the date of said financial statements and the results for the period covered thereby, subject to normal year-end adjustments.  All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.
(b)All financial statements provided pursuant to Section 7.01(a) and Section 7.01(b) have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.
(c)Except as fully disclosed in the balance sheets delivered pursuant to Section 6.07(a) or (b), there were as of the date of delivery of such balance sheets no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Borrower and its Subsidiaries taken as a whole.  As of the date of delivery of such balance sheets, none of the Obligors knows of any basis for the assertion against it of any liability or obligation of any nature that is not fairly disclosed (including, without limitation, as to the amount thereof) in the balance sheets delivered pursuant to Section 6.07(a) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Borrower and its Subsidiaries taken as a whole.
6.08Litigation.  There is no litigation pending or, to the knowledge of any Obligor, threatened against the Borrower or any of its Subsidiaries (i) with respect to the Transactions or (ii) which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
6.09True and Complete Disclosure.
(a)All factual information (taken as a whole) furnished by or on behalf of the Obligors in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents to which any Obligor is a party and any financial statements referred to in Section 6.07(a)) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein is, and all other such factual information  (taken as a whole) hereafter furnished by or on behalf of any Obligor in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects and did not fail to

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state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided (or, if such information expressly relates to a specific date, as of such specific date).
(b)The projections delivered to the Administrative Agent and the Lenders prior to the Original Closing Date have been prepared in good faith and are based on reasonable assumptions (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and that no assurances are given by the Borrower that the projections will be realized).
(c)As of the Original Closing Date, the information contained in the Beneficial Ownership Certification is true and correct in all respects.
6.10Use of Proceeds; Margin Regulations.
(a)All proceeds of the Initial Term Loans funded on the Original Closing Date were used (i) to consummate the Borrowing Date Refinancing, (ii) for payment of fees and expenses relating to the Transaction (as defined in the Original Credit Agreement) and (iii) for general corporate and working capital purposes.
(b)All proceeds of a Borrowing of the Delayed Draw Term Loans will be used to (i) finance up to 90% of the costs of the applicable Scrubber Acquisition for which such Borrowing is to be made (or to otherwise refund the Borrower or the applicable Subsidiary for up to 90% of the costs of such Scrubber Acquisition previously paid by the Borrower or such Subsidiary) and (ii) for payment of fees and expenses in connection with the Restatement Agreement and the other Transactions occurring after the Original Closing Date.
(c)No part of the proceeds of the Loans will be used to buy or carry any Margin Stock or to extend credit for the purpose of buying or carrying any Margin Stock.  Neither the making of the Loans nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations.
(d)No proceeds of the Loans shall be used or made available directly or indirectly to fund, finance, or facilitate any activities, business or transaction of or with any Restricted Party, or in any Sanctioned Country, in violation of any Sanctions Laws, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws or in any manner that could reasonably be expected to result in any Lender Creditor or any Obligor being in violation of Sanctions Laws.
(e)No proceeds of the Loans shall be used, directly or, to the knowledge of any of the Borrower and its Subsidiaries after making due inquiry, indirectly, in furtherance of an offer, payment, promise to pay, or authorization of a payment or giving of money, or anything else of value, to a Foreign Official or any person in violation of the United States Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1 et seq. (“FCPA”), the UK Bribery Act 2010, and the anti-bribery and anti-corruption laws of those jurisdictions in which it does business (collectively, the “Anti-Corruption Laws”).
(f)The Borrower is acting for its own account and the account of its Subsidiaries in connection with the borrowing of the Loans, the performance and discharge of its obligations and liabilities under this Agreement or any of the other Credit Documents and the transactions and other arrangements effected or contemplated hereby or thereby and that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat Money Laundering.

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6.11Taxes; Tax Returns and Payments.
(a)All payments which an Obligor is liable to make under the Credit Documents to which it is a party can properly be made without deduction or withholding for or on account of any Tax payable under any law of any relevant jurisdiction applicable as of the Restatement Effective Date.
(b)The Borrower and each of its Subsidiaries has timely filed with the appropriate Governmental Authorities (or obtained extensions with respect thereto) all U.S. federal income tax returns, statements, forms and reports for Taxes and all other material U.S. and non- U.S. tax returns, statements, forms and reports for Taxes required to be filed by or with respect to the income, properties or operations of the Borrower and/or any of its Subsidiaries (the “Returns”).  All such Returns accurately reflect in all material respects all liability for Taxes of the Borrower and its Subsidiaries as a whole for the periods covered thereby.  The Borrower and each of its Subsidiaries have at all times paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all Taxes payable by them.
(c)There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Borrower or any of its Subsidiaries, threatened by any authority regarding any Taxes relating to the Borrower or any of its Subsidiaries.
(d)As of the Restatement Effective Date, neither the Borrower nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of material Taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.
6.12Compliance with ERISA.  (a)  Except as would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate,
(i)each Plan (and each related trust, insurance contract or fund), other than any Multiemployer Plan and each trust related to the Multiemployer Plan, is in compliance with its terms and with all applicable laws, including without limitation ERISA and the Code;
(ii)each Plan (and each related trust, if any), other than any Multiemployer Plan and any trust related to the Multiemployer Plan, which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service, or still has a remaining period of time in which to apply for or receive such letter and to make any amendments necessary to obtain a favorable determination;
(iii)no Reportable Event has occurred;
(iv)to the knowledge of the Borrower, no Multiemployer Plan is insolvent or in critical status;
(v)no Plan (other than a Multiemployer Plan) has an Unfunded Current Liability;
(vi)each Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA satisfies the minimum funding standard of such sections of the Code or ERISA, and no such Plan has applied for or received a waiver of the minimum funding standard or

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an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 of ERISA;
(vii)all contributions required to be made by the Borrower or any of its Subsidiaries or ERISA Affiliates with respect to a Plan subject to Title IV of ERISA have been or will be timely made (except as disclosed on Schedule V hereto);
(viii)neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has any liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4975 of the Code or reasonably expects to incur any such liability under any of the foregoing sections with respect to any Plan;
(ix)neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA;
(x)no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan, other than a Multiemployer Plan, (other than routine claims for benefits) is pending, or, to the best knowledge of the Borrower, expected or threatened;
(xi)using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the Borrower and its Subsidiaries and ERISA Affiliates have not incurred any liabilities to any Plans which are Multiemployer Plans as a result of a complete withdrawal therefrom;
(xii)no lien imposed under the Code or ERISA on the assets of the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan exists and no event has occurred which could reasonably be expected to give rise to any such lien on account of any Plan (other than a Multiemployer Plan); and
(xiii)the Borrower and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA and subject to ERISA) which provides post-employment health benefits to retired employees or other former employees (other than as required by Section 601 of ERISA or other similar and applicable law).
(b)Except as would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, (i) each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made; (iii) neither the Borrower nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan; and (iv) the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.
6.13Security Documents.  After the execution and delivery thereof and upon the taking of the actions mentioned in the immediately succeeding sentence, each of the Security Documents

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will create in favor of the Security Agent for the benefit of the Secured Creditors a legal, valid and enforceable fully perfected first priority security interest in and Lien on all right, title and interest of the Obligors party thereto in the Collateral described therein, subject to no other Liens other than Permitted Liens.  No filings or recordings are required in order to perfect the security interests created under any Security Document except for filings or recordings to be made on or prior to the Restatement Effective Date pursuant to the Security Documents.
6.14Representations and Warranties in Documents.  On each Borrowing Date, all representations and warranties made by the Borrower and its Subsidiaries in the other Credit Documents shall be true and correct in all material respects at the time at which such representations and warranties were made (or deemed made).
6.15Subsidiaries.  On and as of the Restatement Effective Date, the Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule III.  Schedule III sets forth, as of the Restatement Effective Date, the percentage ownership (direct and indirect) of the Borrower in each class of capital stock or other Equity Interests of each of its Subsidiaries and also identifies the direct owner thereof.  All outstanding shares of Equity Interests of each Subsidiary of the Borrower have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights.  No Subsidiary of the Borrower has outstanding any securities convertible into or exchangeable for its Equity Interests or outstanding any right to subscribe for or to purchase, or any options or warrants for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any character relating to, its Equity Interests or any stock appreciation or similar rights.
6.16Compliance with Statutes, etc.  The Borrower and its Subsidiaries are in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.17Investment Company Act.  Neither the Borrower nor any of the Subsidiary Guarantors is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
6.18Pollution and Other Regulations.  (a)  Each of the Borrower and its Subsidiaries is in compliance with all applicable Environmental Laws including those governing its business, Fleet Vessels, and any other facility or vessel owned, leased, operated or occupied by the Borrower or any of its Subsidiaries, except for such failures to comply as could not reasonably be expected to have a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries is liable for any material penalties, fines or forfeitures for failure to comply with any of the foregoing.
(b)All licenses, permits, registrations or approvals required for the business of the Borrower and each of its Subsidiaries, as conducted as of the Original Closing Date, Fleet Vessels, Real Property, and any other facility or vessel owned, operated or occupied by the Borrower or any of its Subsidiaries under any Environmental Law have been secured and the Borrower and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as could not reasonably be expected to have a Material Adverse Effect.
(c)Neither the Borrower nor any of its Subsidiaries is, to its knowledge, in any respect in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree to which the Borrower or such Subsidiary is a party or which would affect the ability

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of the Borrower or such Subsidiary to operate any Fleet Vessel, Real Property or other facility or vessel and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, such noncompliance, breaches or defaults as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
(d)There are no Environmental Claims pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
(e)There are no facts, circumstances, conditions or occurrences on or relating to the past or present business of the Borrower and each of its Subsidiaries, any Fleet Vessel, Real Property or other facility or vessel currently or formerly owned, operated or occupied by the Borrower or any of its Subsidiaries that is reasonably likely (i) to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries, including relating to any Collateral Vessel, Real Property or other facility or vessel owned by the Borrower or any its Subsidiaries or (ii) to cause such Fleet Vessel, Real Property or other facility or vessel to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case, such Environmental Claims or restrictions that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.
(f)Hazardous Materials have not at any time prior to the Original Closing Date, been (i) generated, used, treated or stored on, or transported to or from, any Fleet Vessel, Real Property or other facility or vessel at any time owned, operated or occupied by the Borrower or any of the Subsidiary Guarantors or (ii) Released on or from any such Fleet Vessel, Real Property or other facility or vessel, except in each case for clauses (i) and (ii) above where such occurrence or event, either individually or in the aggregate, is reasonably likely to have a Material Adverse Effect.
6.19Labor Relations.  Neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect and there is (i) no unfair labor practice complaint pending against the Borrower or any of the its Subsidiaries, to the Borrower’s knowledge, threatened against any of them before the National Labor Relations Board, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or, to the Borrower’s knowledge, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of such  Subsidiaries or, to the Borrower’s knowledge, threatened against the Borrower or any of such  Subsidiaries and (iii) no union representation proceeding pending with respect to the employees of the Borrower or any of such  Subsidiaries, except (with respect to the matters specified in clauses (i), (ii) and (iii) above) as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.20Patents, Licenses, Franchises and Formulas.  Each of the Borrower and each of its Subsidiaries owns, or has the right to use, all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others, except for such failures and conflicts which could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
6.21Financial Indebtedness.  Schedule VIII sets forth a true and complete list of all Financial Indebtedness of the Borrower and its Subsidiaries as of the Initial Borrowing Date, in each

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case showing the aggregate principal amount thereof and the name of the borrower thereunder and any other entity which directly or indirectly guarantees such debt.
6.22Insurance.  Schedule IV-B hereto sets forth a true and complete listing of all insurance maintained by each Obligor with, as of the Restatement Effective Date, the amounts insured (and any deductibles) set forth therein.
6.23Concerning the Collateral Vessels.  The name, registered owner (which shall be a Subsidiary Guarantor), official number, jurisdiction of registration and flag (which shall be an Acceptable Flag Jurisdiction), vessel type, deadweight tonnage, builder’s hull number, built date and Appraised Value as of the Original Closing Date of each Collateral Vessel shall be set forth on Schedule VI hereto.  Each Collateral Vessel owned or to be owned by a Subsidiary Guarantor or the Borrower will be operated in material compliance with all applicable law, rules and regulations.
6.24Citizenship.  The Borrower and each other Obligor which owns or operates, or will own or operate, one or more Collateral Vessels is qualified to own and operate such Collateral Vessel under the laws of the Republic of the Marshall Islands, the Republic of Liberia or Hong Kong, as applicable, or such other jurisdiction in which any such Collateral Vessel is permitted, or will be permitted, to be flagged in accordance with the terms of the respective Collateral Vessel Mortgages.
6.25Vessel Classification; Flag; Flag.  Each Collateral Vessel is (i) classified in the highest class available for vessels of its age and type by an Acceptable Classification Society, free of any conditions or recommendations, other than as permitted, or as will be permitted, under the Collateral Vessel Mortgages and (ii) flagged in an Acceptable Flag Jurisdiction.
6.26Anti-Money Laundering and Sanctions Laws.
(a)To the extent applicable, each of the Borrower and its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (ii) all United States laws relating to terrorism or money laundering including the Executive Order, (iii) the PATRIOT Act and (iv) any analogous European Union or other applicable law, rule or regulation.
(b)None of the Borrower and its Subsidiaries nor, after making due inquiry, any Affiliate of any of the Borrower and its Subsidiaries, is, or will be after consummation of the Transaction and application of the proceeds of the Loans, a Restricted Party.
(c)The Borrower and its Subsidiaries do not, in violation of Sanctions Law, deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Sanctions Law or engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Sanctions Law.
(d)Each of the Borrower and its Subsidiaries and their respective directors, officers, employees or, to the knowledge of the Borrower and its Subsidiaries after making due inquiry, Affiliates, agents or representatives has been for the past five years and is in compliance in all material respects with Sanctions Laws and applicable Anti-Corruption Laws and anti-money laundering laws or regulations in any applicable jurisdiction.

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(e)None of the Borrower nor its Subsidiaries, nor their respective directors, officers, employees, or, to the knowledge of the Borrower and its Subsidiaries after making due inquiry, agents or representatives (i) is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or (ii) is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.
(f)Each of the Borrower and its Subsidiaries has implemented and maintains in effect policies and procedures with respect Anti-Corruption Laws, Sanctions Laws and anti-money laundering laws, which policies and procedures are designed to promote compliance with Sanctions Laws, Anti-Corruption Laws and anti-money laundering laws by it, its Subsidiaries and their respective directors, officers, employees and agents and such parties are required to comply therewith.
6.27No Immunity.  The Borrower does not, nor does any other Obligor or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction. The execution and delivery of the Credit Documents by the Obligors and the performance by them of their respective obligations thereunder constitute commercial transactions.
6.28Fees and Enforcement.  No fees or Taxes, including, without limitation, stamp, transaction, registration or similar Taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Credit Documents other than recording taxes which have been, or will be, paid as and to the extent due.  Under the laws of the each applicable Acceptable Flag Jurisdiction, the choice of the laws of the State of New York as set forth in the Credit Documents which are stated to be governed by the laws of the State of New York is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such Obligor of an agent for service of process, in each case as set forth in such Credit Documents, is legal, valid, binding and effective.
6.29Form of Documentation.  Each of the Credit Documents is in proper legal form under the laws of the applicable Acceptable Flag Jurisdiction for the enforcement thereof under such laws, subject only to such matters which may affect enforceability arising under the law of the State of New York.  To ensure the legality, validity, enforceability or admissibility in evidence of each such Credit Document in the applicable Acceptable Flag Jurisdiction, it is not necessary that any Credit Document or any other document be filed or recorded with any court or other authority in the applicable Acceptable Flag Jurisdiction, or notarized or executed under seal, or physically executed in any such jurisdiction, except as have been made, or will be made, on or prior to the Restatement Effective Date.
6.30No Material Adverse Effect.  Since December 31, 2017, nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
6.31Pari Passu or Priority Status.  The claims of the Administrative Agent, the Security Agent and the Lenders against the Borrower and the other Obligors under this Agreement or the other Credit Documents will rank at least pari passu with the claims of all unsecured creditors of the Borrower or any other Obligor, as the case may be (other than claims of such creditors to the extent that they are statutorily preferred), and senior in priority to the claims of any creditor of the Borrower or any other Obligor.
6.32Solvency; Winding-up, etc.  (a)  On and as of the Restatement Effective Date and the applicable Delayed Draw Funding Date and after giving effect to the Transaction and to all Financial

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Indebtedness (including the Loans) being incurred or assumed and Liens created by the Obligors in connection therewith (i) the sum of the assets (including its right of contribution and subrogation it may have with respect to any other Person), at a fair valuation, of each Obligor on a stand-alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed their respective debts, (ii) each Obligor on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their respective ability to pay such debts as such debts mature and (iii) each Obligor on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole do not have unreasonably small working capital with which to continue their respective businesses.  For purposes of this Section 6.32(a), “debt” shall mean any liability on a claim, and “claim” shall mean (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
(b)Neither the Borrower nor any other Obligor has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to its knowledge and belief) threatened against any of them for the winding-up, dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of any of them or any or all of their assets or revenues nor have any of them sought any other relief under any applicable insolvency or bankruptcy law.
6.33Completeness of Documentation.  The copies of the Technical Management Agreements delivered to the Administrative Agent are true and complete copies of each such document constituting valid and binding obligations of the parties thereto enforceable in accordance with their respective terms and no action has been taken, to the best knowledge of the Borrower, by the parties thereto which would in any way render such document inoperative or unenforceable.
SECTION 7Affirmative Covenants.  The Borrower hereby covenants and agrees that on and after the Original Closing Date and until the Loans and Notes (in each case together with interest thereon), Fees and all other Credit Document Obligations (other than indemnities described in Section 11.01(b) which are not then due and payable) incurred hereunder and thereunder, are paid in full:
7.01Information Covenants.  The Borrower will furnish to the Administrative Agent, with sufficient copies for each of the Lenders:
(a)Quarterly Financial Statements.  Commencing with the fiscal quarter ending June 30, 2018, within 45 days (or, if applicable, such shorter period as the Securities and Exchange Commission shall specify for the filing of quarterly reports on Form 10-Q if the Borrower is required to file such a quarterly report) after the end of each of the first three fiscal quarters of each fiscal year, (i) a consolidated balance sheet and related statements of operations and cash flows showing the financial position of the Borrower and its Subsidiaries as of the close of such fiscal quarter and the consolidated results of its operations during such fiscal quarter and the then-elapsed portion of the fiscal year and setting forth in comparative form the corresponding figures for the corresponding periods of the prior fiscal year, all of which shall be in reasonable detail and which consolidated balance sheet and related statements of operations and cash flows shall be certified by an Authorized Officer of the Borrower as fairly presenting, in all material respects, the financial position and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP (subject to normal year-end audit

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adjustments and the absence of footnotes) and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal quarters.
(b)Annual Financial Statements.  Within 90 days (or, if applicable, such shorter period as the Securities and Exchange Commission shall specify for the filing of annual reports on Form 10-K if the Borrower is required to file such an annual report) after the end of each fiscal year, (i) a consolidated balance sheet and related statements of operations, cash flows and owners’ equity showing the financial position of the Borrower and its Subsidiaries as of the close of such fiscal year and the consolidated results of its operations during such fiscal year and setting forth in comparative form the corresponding figures for the prior fiscal year, which consolidated balance sheet and related statements of operations, cash flows and owners’ equity shall be audited by independent public accountants of recognized national standing and accompanied by an opinion of such accountants (which shall not be qualified in any material respect) to the effect that such consolidated financial statements fairly present, in all material respects, the financial position and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.
(c)Projections, etc.  As soon as available but not more than 45 days after the end of each calendar year, cash flow projections (including a balance sheet and statement of profit and loss and cash flow) of the Borrower and its Subsidiaries in reasonable detail for the calendar year in which such cash flow projections are actually delivered.
(d)Appraisal Reports.  At the time of delivery of the certificates provided for in Section 7.01(e), and at any other time at the option of the Borrower or within 14 days of the written request of the Administrative Agent, Appraisals for each Collateral Vessel dated no more than 30 days prior to the delivery thereof in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers stating the then current Appraised Value of each Collateral Vessel; provided that, it is acknowledged and agreed that, solely with respect to the Compliance Certificate required to be delivered with the financial statements for the fiscal quarter ending June 30, 2018 pursuant to Section 7.01(a), the Appraisals delivered to the Administrative Agent pursuant to Section 5.02(d) shall satisfy the requirements of this Section 7.01(d) for such fiscal quarter. All such Appraisals shall be conducted by, and made at the expense of, the Borrower (it being understood that the Administrative Agent may and, at the request of the Required Lenders, shall, upon notice to the Borrower, obtain such Appraisals and that the cost of all such Appraisals will be for the account of the Borrower); provided that, unless an Event of Default shall then be continuing, in no event shall the Borrower be required to pay for more than two Appraisals in excess of the quarterly Appraisals obtained pursuant to this Section 7.01(d) in any single fiscal year of the Borrower, with the cost of any such reports in excess thereof to be paid by the Lenders on a pro rata basis.
(e)Officer’s Compliance Certificates.
(i)At the time of the delivery of the financial statements provided for in Sections 7.01(a) and (b), a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit I-1 (a “Compliance Certificate”) to the effect that no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall (x) set forth the calculations required to establish whether the Borrower is in compliance with the Financial Covenants at the end of the relevant fiscal quarter or year, as the case may be, (y) [reserved] and (z) certify that there have been no changes to any of the representations or warranties set forth in each of the Security Documents since the Original Closing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(e), or if there have been any such changes, a list in reasonable detail of such changes and whether the

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Borrower and the other Obligors have otherwise taken all actions required to be taken by them pursuant to such Security Documents or any one of them.
(ii)At the time of the delivery of the Compliance Certificate provided for in clause (i) above, a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit I-2 to the effect that no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall set forth the calculations required to establish whether the Borrower is in compliance with the Financial Covenant set forth in Section 8.07(d).
(iii)At the time of a Collateral Disposition in respect of any Collateral Vessel (other than an Additional Vessel or Specified Exchange Collateral Vessel), a certificate of an Authorized Officer of the Borrower which certificate shall (x) certify on behalf of the Borrower the last Appraisals received pursuant to Section 7.01(d) determining the Aggregate Appraised Value of all Collateral Vessels, after giving effect to such disposition(s) and/or showing the individual Appraised Value of all Collateral Vessels owned by the Subsidiary Guarantors which have not been sold, transferred, lost or otherwise disposed of at such time, and (y) set forth the calculations required to establish whether the Borrower is in compliance with the provisions of Section 8.07(d) after giving effect to such disposition.
(f)Notice of Default, Material Litigation, Event of Loss or Major Casualty.  Promptly, and in any event within three (3) Business Days after the Borrower obtains actual knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto, (ii) any material litigation or governmental investigation or proceeding pending or threatened against the Borrower or any of its Subsidiaries, (iii) any Event of Loss in respect of any Collateral Vessel, (iv) any Major Casualty in respect of any Collateral Vessel and (v) any material default under any charter relating to a Collateral Vessel.
(g)Other Reports and Filings.  Promptly, (i) copies of all financial information, proxy materials and other information and reports, if any, which the Borrower or any of its Subsidiaries has filed with the Securities and Exchange Commission (or any successor thereto) and (ii) copies of all financial information and other information and reports, if any, which the Borrower or any of its Subsidiaries has delivered to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor).
(h)Environmental Matters.  Promptly upon, and in any event within five (5) Business Days after, the Borrower obtains knowledge thereof, written notice of any of the following environmental matters occurring after the Original Closing Date, except to the extent that such environmental matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:
(i)any Environmental Claim pending or threatened in writing against the Borrower or any of its Subsidiaries or any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries;
(ii)any condition or occurrence on or arising from any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries or any other location that (A) results in noncompliance by the Borrower or such Subsidiary with any applicable Environmental Law or (B) could reasonably be expected to form the basis of an Environmental

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Claim against the Borrower or any of its Subsidiaries or relating to any such Collateral Vessel or property;
(iii)any condition or occurrence on any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries that could reasonably be expected to cause such Collateral Vessel or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Borrower or any of its Subsidiaries of such Collateral Vessel or property under any Environmental Law; and
(iv)the conducting of any removal or remedial action in response any the actual or alleged presence or Release of any Hazardous Material on or from any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall deliver to the Administrative Agent all material notices received by the Borrower or any of its Subsidiaries from any government, governmental agency or any Person relating to, under, or pursuant to, CERCLA or OPA or their state equivalents.
All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower’s or such Subsidiary; response thereto.  In addition, the Borrower will provide the Administrative Agent with copies of all material communications with any government, governmental agency or Person relating to any Environmental Claim of which notice is required to be given pursuant to this Section 7.01(h), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Administrative Agent or the Required Lenders.
(i)Sanctions and Money Laundering Matters.  Promptly and in any event within three (3) Business Days after any Obligor obtains actual knowledge thereof, the relevant Obligor shall supply to the Administrative Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority or implemented to combat Money Laundering against it, any of its Subsidiaries, any of its Affiliates, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation, (ii) that any Obligor, any of its Subsidiaries, any of its Affiliates, or any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives has become or is likely to become a Restricted Party and (iii) information, certificates and any documents with respect to such Obligor reasonably required by a Lender to ensure such Lender’s compliance with any law, official requirement or other regulatory measure or procedure implemented to combat Money Laundering.
(j)Management Letters.  Promptly after the Borrower’s or any Subsidiary’s receipt thereof, a copy of any “management letter” received from its certified public accountants and management’s response thereto.
(k)Other Information.  From time to time, such other information with respect to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries as the Administrative Agent (or the Lenders through the Administrative Agent) may reasonably request.
Documents required to be delivered pursuant to Section 7.01(a), 7.01(b) and/or 7.01(g)(i) may be delivered electronically and, if so delivered shall be deemed furnished and delivered on the date such information (x) has been posted on the SEC website accessible through

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http://www.sec.gov/edgar/searchedgar/webusers.htm or such successor webpage of the Securities and Exchange Commission thereto and (y) other than with respect to documents to be delivered pursuant to Section 7.01(g)(i), the Administrative Agent shall have been notified thereof, such notification which shall be deemed to be received by the Administrative Agent with respect to the documents required to be delivered pursuant to Section 7.01(a) and 7.01(b) upon delivery of the Compliance Certificate pursuant to Section 7.01(e)(i); provided that upon request of the Administrative Agent (acting on the instructions of the Required Lenders), the Borrower shall deliver copies of such documents to the Administrative Agent until a written request to cease delivering paper copies is given by the Administrative Agent (acting on the instructions of the Required Lenders). Notwithstanding anything to the contrary herein, in every instance, the Borrower shall be required to provide copies of the Compliance Certificate required by Section 7.01(e)(i) to the Administrative Agent and each of the Lenders and no such public filings shall be deemed to be a substitute therefor.
7.02Books, Records and Inspections.  The Borrower will, and will cause its Subsidiaries to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with generally accepted accounting principles and all requirements of law, shall be made of all dealings and transactions in relation to its business.  The Borrower will, and will cause its Subsidiaries to, permit officers and designated representatives of the Administrative Agent and the Lenders as a group to visit and inspect during regular business hours and under guidance of officers of the Borrower or its Subsidiaries, any of the properties of the Borrower or any of its Subsidiaries, and to examine the books of account of the Borrower or such Subsidiary and discuss the affairs, finances and accounts of the Borrower or such Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or the Required Lenders may request; provided that, unless an Event of Default exists and is continuing at such time, the Administrative Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Borrower.
7.03Maintenance of Property; Insurance Mortgagee Interest Insurance.  (a)  The Borrower will, and will cause each of the Subsidiary Guarantors to, (i) keep all material property necessary to its business in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted), (ii) maintain insurance with respect to material property that is not Collateral Vessels in at least such amounts and against at least such risks as are in accordance with normal industry practice for similarly situated insureds, (iii) maintain the Required Insurance with respect to the Collateral Vessels at all times and (iv) furnish to the Administrative Agent, at the written request of the Administrative Agent, a complete description of the material terms of insurance carried, or, at the Borrower’s option, copies of such policies.
(b)The Borrower will reimburse the Administrative Agent, the Security Agent and/or the Lenders for all costs, fees and expenses incurred in relation to Mortgagee’s Insurances.
7.04Corporate Franchises.  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business; provided that nothing in this Section 7.04 shall prevent (i) sales or other dispositions of assets, consolidations or mergers by or involving the Borrower or any Subsidiary which are permitted in accordance with Section 8.02 or (ii) the abandonment by the Borrower or any Subsidiary of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.

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7.05Compliance with Statutes, etc.  The Borrower will, and will cause each of its Subsidiaries to:
(a)comply with all applicable statutes, regulations and order of, and all applicable restrictions (including all laws and regulations relating to money laundering and corrupt practices, including the FCPA) imposed by, all Governmental Authorities: (i) applicable to their business, except when the failure to comply could not reasonably be expected to have a Material Adverse Effect, (ii) applicable to each Collateral Vessel, its ownership, employment, operation, management and registration, with respect to the ISM Code, the ISPS Code, all Environmental Laws, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect, and the laws of the relevant Acceptable Flag Jurisdiction and (iii) applicable to each Collateral Vessel, its ownership, employment, operation, management and registration, with respect to all Sanctions Laws;
(b)obtain, comply with and do all that is necessary to maintain in full force and effect any permits, licenses, and approvals required by any Environmental Law; and
(c)without limiting paragraph (a) above, not employ any Collateral Vessel nor allow its employment, operation or management in any manner contrary to any applicable law or regulation including, but not limited, to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws.
7.06Compliance with Environmental Laws.  (a) The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all Environmental Laws applicable to the business of the Borrower and each of its Subsidiaries, the ownership or use of any Collateral Vessel, Real Property or other property, facility or vessel now or hereafter owned, operated or occupied by the Borrower or any of its Subsidiaries, pay or cause to be paid within a reasonable time period all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and keep or cause to be kept all such Collateral Vessel, Real Property, or other property, facility or vessel free and clear of any Liens imposed pursuant to such Environmental Laws.  Neither the Borrower nor any of its Subsidiaries will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of, Hazardous Materials on or from any Collateral Vessel, Real Property or other property, facility or vessel now or hereafter owned, operated or occupied by the Borrower or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property, except in each case in material compliance with all applicable Environmental Laws and as reasonably required in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses. The Borrower will, and will cause each of its Subsidiaries to, maintain insurance on the Collateral Vessels and any other Fleet Vessel in at least such amounts as are in accordance with normal industry practice for similarly situated insureds, against losses from oil spills and other environmental pollution.
(b) The Borrower shall ensure that each Fleet Vessel which is to be recycled shall, at the time of such recycling, be recycled in compliance with either (i) the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the “Convention”) and the applicable guidelines and requirements issued by the International Maritime Organization in connection with the Convention or any Governmental Authority or under any Environmental Law relating thereto or (ii) Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC (Text with EEA relevance).

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(c) Subject to clause (vii)(d) of the definition of “Collateral and Guaranty Requirements”, the Borrower shall procure that each Collateral Vessel has obtained an IHM, or equivalent document acceptable to the Administrative Agent, in respect of that Fleet Vessel, which shall be kept up to date and maintained until the Maturity Date in compliance with all applicable requirements (e.g., European Union regulations).
7.07ERISA.  (a)  As soon as reasonably possible and, in any event, within 10 days after the Borrower knows or has reason to know of the occurrence of any of the following that could reasonably be expected to result in a Material Adverse Effect, the Borrower will deliver to the Administrative Agent a certificate of an Authorized Officer of the Borrower setting forth the details as to such occurrence and the action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to take:
(i)that a Reportable Event has occurred (except to the extent that the Borrower has previously delivered to the Administrative Agent a certificate concerning such event pursuant to the next clause hereof); or
(ii)that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (which is not waived), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; or
(iii)that a Plan (other than a Multiemployer Plan) has failed to satisfy the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, or an application has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code or Section 303 of ERISA with respect to a Plan (other than a Multiemployer Plan); or
(iv)that any contribution required to be made by the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan subject to Title IV of ERISA or by the Borrower or any of its Subsidiaries with respect to a Foreign Pension Plan has not been timely made; or
(v)that a Plan has been terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; or
(vi)that Borrower or any of its Subsidiaries or any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA; or
(vii)that the Borrower or any of its Subsidiaries or any ERISA Affiliate has any liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 4975 of the Code.
(b)The Borrower and each of its applicable Subsidiaries shall ensure that all Foreign Pension Plans administered by it, and shall monitor that all other Foreign Pension Plans into which it makes payments, obtain or retain (as applicable) registered status under and as required by applicable law and are administered in a timely manner in all respects in compliance with all applicable laws except

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where the failure to do any of the foregoing could not be reasonably likely to result in a Material Adverse Effect.
7.08End of Fiscal Years; Fiscal Quarters.  The Borrower will cause (i) each of its and its Subsidiaries’ fiscal years to end on December 31 and (ii) each of its and its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year or such other date as shall be agreed to by the Administrative Agent (such consent not to be unreasonably withheld).
7.09Performance of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Credit Documents) by which it is bound, except such non-performances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.10Payment of Taxes.  The Borrower will, and will cause each of its Subsidiaries to, pay and discharge, all material Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 8.01; provided that neither the Borrower nor any of its Subsidiaries shall be required to pay any such Tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it maintains adequate reserves with respect thereto in accordance with GAAP.
7.11Further Assurances.  (a)  The Borrower, and each other Obligor, agrees that at any time and from time to time, at the expense of the Borrower or such other Obligor, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Administrative Agent may reasonably require, to perfect and protect any Lien granted or purported to be granted hereby or by the other Credit Documents, or to enable the Security Agent to exercise and enforce its rights and remedies with respect to any Collateral.  Without limiting the generality of the foregoing, the Borrower will execute, if required, and file, or cause to be filed, such financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), or amendments thereto, such amendments or supplements to the Collateral Vessel Mortgages (including any amendments required to maintain Liens granted by such Collateral Vessel Mortgages), and such other instruments or notices, as may be reasonably necessary, or that the Administrative Agent may reasonably require, to protect and preserve the Liens granted or purported to be granted hereby and by the other Credit Documents.
(b)The Borrower hereby authorizes the Security Agent to file one or more financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral without the signature of the Borrower or any other Obligor, where permitted by law.  The Security Agent will promptly send the Borrower a copy of any financing or continuation statements which it may file without the signature of the Borrower or any other Obligor and the filing or recordation information with respect thereto.
(c)If at any time any Subsidiary of the Borrower owns a Collateral Vessel or owns, directly or indirectly, an interest in any Subsidiary which owns a Collateral Vessel and the Collateral and Guaranty Requirements with respect to such Subsidiary has not been satisfied, the Borrower will cause the Collateral and Guaranty Requirements with respect to such Subsidiary (and any Subsidiary which directly or indirectly owns the Equity Interests of such Subsidiary to the extent not an Obligor) to be

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satisfied with respect to each relevant Collateral Vessel as if such Subsidiary had been an Obligor on the Original Closing Date.
(d)At the reasonable written request of any counterparty to a Secured Hedging Agreement entered into after the Original Closing Date (to the extent permitted under this Agreement to be entered into and secured) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Secured Hedging Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Obligor and, at the written direction of the Security Agent, the mortgagee, shall promptly execute an amendment to each Collateral Vessel Mortgage adding obligations under such Secured Hedging Agreement as an additional Secured Obligation under each Collateral Vessel Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement or in the Pledge Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Security Agent.
7.12Deposit of Earnings. On and after the Initial Borrowing Date, each Obligor will cause the Earnings derived from each of the respective Collateral Vessels, to the extent constituting Earnings Collateral and Insurance Collateral, to be deposited by the respective account debtor in respect of such earnings into one or more of the Earnings Accounts maintained for such Obligor or the Borrower from time to time (it being understood that, absent an Event of Default, the Borrower and its Subsidiaries shall have full access to the funds within such Earnings Account).  Without limiting any Obligor’s obligations in respect of this Section 7.12, each Obligor agrees that, in the event it receives any earnings constituting Earnings Collateral and Insurance Collateral, or any such earnings are deposited other than in one of the Earnings Accounts, it shall promptly deposit all such proceeds into one of the Earnings Accounts maintained for such Obligor or the Borrower from time to time.  No Obligor will enter into any agreement or arrangement for the sharing of any Earnings Collateral and Insurance Collateral (other than with respect to pooling arrangements in the ordinary course of business).
7.13Ownership of Subsidiaries and Collateral Vessels.  (a)  The Borrower will directly (or indirectly through a Wholly-Owned Subsidiary of the Borrower), own 100% of the Equity Interests in each Subsidiary Guarantor.
(b)The Borrower shall cause each Subsidiary Guarantor, to at all times, be directly wholly-owned by one or more Obligors.
(c)The Borrower will cause each Collateral Vessel to be owned at all times by a single Subsidiary Guarantor that owns no other Fleet Vessels.
7.14Citizenship; Flag of Collateral Vessel; Collateral Vessel Classifications; Operation of Collateral Vessels.  (a)  The Borrower shall, and shall cause each Subsidiary Guarantor that owns a Collateral Vessel to, cause each Collateral Vessel to be registered in an Acceptable Flag Jurisdiction. The Borrower will, and will cause each Subsidiary Guarantor which owns or operates a Collateral Vessel to, be qualified to own and operate such Collateral Vessel under the laws of the applicable Acceptable Flag Jurisdiction, in each case in accordance with the terms of the related Collateral Vessel Mortgage.  Notwithstanding the foregoing, any Obligor may transfer a Collateral Vessel to another Acceptable Flag Jurisdiction pursuant to the requirements set forth in the definition of “Flag Jurisdiction Transfer”.
(b)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to (i) comply with and satisfy in all material respects all applicable Legal Requirements of the jurisdiction of such Collateral Vessel’s home port, now or hereafter from time to time in effect, in

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order that such Collateral Vessel shall continue to be registered pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Collateral Vessel for participation in the trades and services to which it may be dedicated from time to time or (ii) not do or allow to be done anything whereby such registration is or could reasonably be expected to be forfeited.
(c)Other than as a result of damage or casualty, the Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to keep such Collateral Vessel in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Collateral Vessel is classified in the highest class available for vessels of its age and type with an Acceptable Classification Society, free of any overdue conditions or overdue recommendations affecting the class of such Collateral Vessel; provided that if the classification of any of the Collateral Vessels shall be subject to any such overdue recommendations, the Borrower will and will cause each Subsidiary Guarantor which owns such Collateral Vessel to provide a written report to the Administrative Agent describing the overdue recommendations and assessing the steps required to be taken to prevent such overdue recommendations from affecting such Collateral Vessel’s classification.
(d)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to (i) make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Collateral Vessel will not be materially impaired and (ii) except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Obligors installed on such Collateral Vessel except in the ordinary course of the operation and maintenance of such Collateral Vessel unless (x) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Lien (other than Permitted Liens) in favor of any Person other than the Security Agent and becomes, upon installation on such Collateral Vessel, the property of the Obligors and subject to the security constituted by the Collateral Vessel Mortgage or the Pledge Agreement or (y) the removal will not materially diminish the value of such Collateral Vessel.
(e)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to submit such Collateral Vessel to such periodic or other surveys as may be required for classification purposes and, upon the written request of the Security Agent, supply to the Security Agent copies of all survey reports and classification certificates issued in respect thereof.
(f)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Liens (other than Permitted Liens) on, or claims enforceable against, such Collateral Vessel other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Collateral Vessel pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Lien or claim as aforesaid, procure, if possible, the release of such Collateral Vessel from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.
(g)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to maintain, or cause to be maintained by the charterer or lessee of any Collateral Vessel, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable Legal Requirements for any Collateral Vessel and such other similar certificates as

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may be required in the course of the operations of any Collateral Vessel pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable Legal Requirements.
(h)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to cause such Collateral Vessels to be managed by its Technical Manager and a Commercial Manager; provided that nothing herein shall prohibit the Collateral Vessels from being entered into pooling arrangements with Pool Managers.
(i)The Borrower will and will cause each Subsidiary Guarantor which owns a Collateral Vessel to cause each Collateral Vessel to be used only for civil merchant trading.
7.15Use of Proceeds.  (a) The Borrower will use the proceeds of the Loans only as provided in Section 6.10.
(b)The Borrower shall not (and shall procure that none of its Subsidiaries will) (i) in violation of any applicable Sanctions Laws or in any manner that would cause any Lender Creditor to be in violation of any applicable Sanctions Laws, repay or prepay the Loans under this Agreement or any part thereof from funds or assets that constitute property of, or that are beneficially owned directly or indirectly by, any Restricted Party, or from funds or assets obtained or derived from transactions with or relating to any Sanctioned Country or (ii) fund all or any part of any payment under this Agreement out of proceeds derived from transactions in violation of any applicable Sanctions Laws or in any manner that would cause any Lender Creditor to be in violation of any applicable Sanctions Laws.
7.16Charter Contracts.  In connection with any time charters having a stated term in excess of 24 months the applicable Obligor shall (i) at its own cost and expense, promptly and duly execute and deliver to the Security Agent an Assignment of Charter in respect of such charter contract and (ii) will notify the charterer under such charter of such Assignment of Charter and use its commercially reasonable efforts to cause such charterer to execute and deliver to the Security Agent a consent to such Assignment of Charter in form and substance satisfactory to the Administrative Agent.
7.17Technical Management Agreements.  On and after the Initial Borrowing Date, the Borrower will cause each Technical Manager’s rights to payment under its respective Technical Management Agreement and any liens created in favor of the Technical Manager thereunder to be subordinated to those of the Lenders pursuant to a duly executed manager’s undertaking in a form consistent with market practice in ship finance transactions delivered by each Technical Manager (it being understood that the Borrower will use commercially reasonable efforts after the Initial Borrowing Date to obtain such manager’s undertakings from any Technical Manager which is not an Affiliate of the Borrower) in favor of the Security Agent in a form and substance reasonably acceptable to the Security Agent.
7.18Separate Existence.  (a) The Borrower will, and will cause each of its Subsidiaries to:
(i)maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Subsidiaries;
(ii)maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or

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otherwise identify its assets and liabilities separate and distinct from the assets and liabilities of the other Subsidiaries;
(iii)not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Subsidiaries provided nothing herein shall prohibit transactions permitted by Section 8.05;
(iv)observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Organizational Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings; and
(v)except as permitted by Section 8.02, not be consensually merged or consolidated with the other Subsidiaries (other than for financial reporting purposes).
(b)The Borrower and its Subsidiaries shall ensure that:
(i)all transactions, agreements and dealings between the Borrower and the Subsidiaries (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;
(ii)transactions between any of the Borrower and the Subsidiaries, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Subsidiary, as applicable, as an entity separate and distinct from the Borrower or such Subsidiary, as applicable; and
(iii)no Subsidiary will refer to the Borrower as a department or division of such Subsidiary and will not otherwise refer to the Borrower in a manner inconsistent with its status as a separate and distinct legal entity.
7.19Sanctions.  (a)  The Borrower and its Subsidiaries shall ensure that none of it, nor any of its directors, officers or employees, and shall use its best efforts to ensure that none of its agents or representatives or any other person acting on any of their behalf is or will become a Restricted Party.
(b)The Borrower and its Subsidiaries shall:
(i)ensure that any Collateral Vessel owned and controlled by it shall not be used by or for the benefit of any Restricted Party in violation of Sanctions Law;
(ii)ensure that such Collateral Vessel shall not be used in trading in violation of Sanctions Laws;
(iii)ensure that such Collateral Vessel shall not be used in trading in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurance Collateral relating to such Collateral Vessel,
(iv)use commercially reasonable efforts to ensure that each charterparty in respect of such Collateral Vessel entered into after the Original Closing Date shall contain, for the benefit of the relevant Obligor, language which gives effect to the provisions of this Section 7.19 and

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permits refusal of employment or voyage orders which would result in a violation of Sanctions Law.
7.20Maintenance of Listing.  The Borrower shall maintain its listing on the New York Stock Exchange or such other reputable international stock exchange approved by the Administrative Agent (acting on the instructions of the Required Lenders) in writing, such approval not to be unreasonably withheld or delayed.
7.21Specified Exchange Transactions.  At any time during the Specified Exchange Period, the Borrower shall be entitled to undertake the purchase and sale transactions set forth in each Vessel Exchange MOA pursuant to which the Borrower, each Specified Exchange Collateral Vessel Owner and (as the case may be) each New Exchange Vessel Owner intend to acquire the New Exchange Vessels in exchange for the Specified Exchange Collateral Vessels as set forth in the applicable Vessel Exchange MOA, subject to the following conditions:
(a)the Borrower and each New Exchange Vessel Owner shall comply with the Collateral and Guaranty Requirements with respect to such New Exchange Vessel Owner and each New Exchange Vessel no later than the date on which such New Exchange Vessel becomes a Collateral Vessel hereunder;
(b)the Borrower shall ensure that at all times during the Specified Exchange Period the ratio of (i) the aggregate outstanding principal amount of Loans under this Agreement (without giving effect to any Scheduled Repayments during the Specified Exchange Period) to (ii) the sum of all cash on deposit in the Cash Collateral Account plus the Appraised Value of the Collateral Vessels then pledged to secure the Secured Obligations, is not greater than 64%; provided that the Borrower shall be entitled to (x) provide Additional Collateral in the form of cash deposited in a Cash Collateral Account or (y) prepay the Loans on a pro rata basis, in each case, in an amount sufficient to ensure compliance with such ratio; provided, further, that the Security Agent shall (and the Lenders hereby authorize the Security Agent to), upon the request of the Borrower, release any Additional Collateral provided under this clause (b) and terminate the related Security Documents with respect to such Additional Collateral, if applicable, if the Borrower has delivered an officer’s certificate certifying as to compliance with the ratio set forth in this clause (b) upon the release of the Additional Collateral;
(c)before and after giving effect to the release of any Collateral with respect to a Specified Exchange Collateral Vessel, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Borrower shall be, and shall have been at all times during the most recently ended full fiscal quarter, in compliance with Section 8.07(d);
(d)the Borrower shall have delivered to the Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent and the Security Agent, (i) an officer’s certificate certifying as to matters in clauses (b) and (c) above, (ii) Appraisals for each Collateral Vessel dated no more than thirty (30) days prior to the Fifth Amendment Effective Date in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers stating the then current Appraised Value of each Collateral Vessel (including, for the avoidance of doubt, any New Exchange Vessel) and otherwise meeting the requirements set forth in Section 7.01(d), which Appraisals shall be used for all calculations during the Specified Exchange Period and (iii) any other documents reasonably requested by the Administrative Agent;
(f)Schedules X-1 and X-2 shall be amended by the Administrative Agent as of the last day of the Specified Exchange Period to reflect a recalculated Amortization Amount based on the

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outstanding Loans as of such date and Collateral Vessels owned by the Obligors as of such date in accordance with, and to the extent required by, the requirements of Section 4.02(a)(iii);
(g)Schedule III, Schedule IV-B and Schedule VI shall be amended by the Borrower as of the last day of the Specified Exchange Period to reflect the Subsidiaries of the Borrower and the Collateral Vessels owned by the Obligors as of such date.
SECTION 8Negative Covenants.  The Borrower hereby covenants and agrees that on and after the Original Closing Date (or, with respect to Sections 8.01, 8.07, 8.09 and 8.13 only, the Initial Borrowing Date) and until the Loans and Notes (in each case together with interest thereon), Fees and all other Credit Document Obligations (other than indemnities described in Section 11.01(b) which are not then due and payable) incurred hereunder and thereunder, are paid in full:
8.01Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any Collateral, whether now owned or hereafter acquired, or sell any such Collateral subject to an understanding or agreement, contingent or otherwise, to repurchase such Collateral (including sales of accounts receivable with recourse to the Borrower or any of its Subsidiaries); provided that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “Permitted Liens”):
(a)inchoate Liens for Taxes, assessments or governmental charges or levies not yet due and payable or Liens for Taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;
(b)Liens imposed by law, which were incurred in the ordinary course of business and do not secure Financial Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens, liens for necessaries, salvage liens, general average liens, liens in respect of or covered by insurance (including permitted deductibles) and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of the Collateral and do not materially impair the use thereof in the operation of the business of the Borrower or any Subsidiary or (y) which are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Collateral subject to any such Lien;
(c)Liens created pursuant to the Security Documents;
(d)Liens arising out of judgments, awards, decrees or attachments with respect to which the Borrower or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review; provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed the Materiality Amount;
(e)Liens in respect of seamen’s wages, chartering operations, drydocking and maintenance which are not past due and other maritime Liens arising in the ordinary course of business up to an aggregate amount not to exceed the Materiality Amount, which are for amounts (x) not more than 30 days past due or (y) which are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Collateral subject to any such Lien;

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(f)Liens granted in favor of Nordea, its branches and/or its Affiliates pursuant to the account agreements establishing any Earnings Account;
(g)Liens which rank after the Liens created by the Security Documents to secure the performance of bids, tenders, bonds or contracts; provided that such bids, tenders, bonds or contracts directly relate to the Collateral Vessels, are incurred in the ordinary course of business and do not relate to the incurrence of Financial Indebtedness for borrowed money; provided, further, that at any time outstanding, the aggregate amount of Liens under this clause (g) shall not secure obligations in excess of the Materiality Amount;
(h)Liens for salvage or general average for amounts which are not delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted if adequate reserves with respect thereto are maintained on the books of the applicable Obligor in accordance with GAAP;
(i)Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, Liens to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations in each case incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money) and Liens arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that the aggregate value of all cash and property at any time encumbered pursuant to this clause (i) shall not exceed $2,500,000;
(j)Easements, rights-of-way, restrictions, encroachments, exceptions to title and other similar charges or encumbrances on any Collateral Vessel or any other property of the Borrower or any of its Subsidiaries arising in the ordinary course of business which do not materially detract from the value of such Collateral Vessel or the property subject thereto; and
(k)bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Borrower or any Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements.
In connection with the granting of Liens described above in this Section 8.01 by the Borrower or any of its Subsidiaries, the Administrative Agent and the Security Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by executing appropriate lien subordination agreements in favor of the holder or holders of such Liens, in respect of the item or items of equipment or other assets subject to such Liens).
8.02Consolidation, Merger, Sale of Assets, etc.  The Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its affairs or enter into, any transaction of merger or consolidation, or convey, sell, lease, charter (otherwise than in the ordinary course of business but excluding any bareboat charter) or otherwise dispose of all or substantially all of its assets (determined on a consolidated basis) or any of the Collateral, or enter into any sale-leaseback transactions involving all or substantially all of its assets (determined on a consolidated basis) or any of the Collateral, except that:

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(a)the Borrower and each of its Subsidiaries may sell, lease or otherwise dispose of any Fleet Vessel (or 100% of the Equity Interests of the Subsidiary that owns such Fleet Vessel); provided that in the case of any Collateral Vessels (other than the Specified Exchange Collateral Vessels), (i) such sale is made at fair market value (taking into consideration the Appraisals most recently delivered to the Administrative Agent (or obtained by the Administrative Agent) pursuant to Section 7.01(d) or delivered at the time of such sale to the Administrative Agent by the Borrower), (ii) 100% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or the respective Subsidiary Guarantor which owned such Collateral Vessel, on the date of consummation of such sale, (iii) the net cash proceeds of such sale or other disposition shall be applied as required by Section 4.02(b) to repay the Loans, (iv) no Default or Event of Default shall exist at such time and (v) before and after giving effect to any sale of a Collateral Vessel, the Borrower shall be in pro forma compliance with the Collateral Maintenance Test;
(b)(i) any Obligor may transfer assets or lease to or acquire or lease assets from any other Obligor and (ii) the Borrower or any Subsidiary of the Borrower (other than a Subsidiary Guarantor) may transfer assets or lease to or acquire or lease assets from the Borrower or any other Subsidiary of the Borrower (other than a Subsidiary Guarantor) or any Subsidiary of the Borrower (other than a Subsidiary Guarantor) may be merged into any Subsidiary of the Borrower (other than a Subsidiary Guarantor) or any Subsidiary Guarantor may be merged into the Borrower or any other Subsidiary Guarantor, in each case so long as (x) all actions necessary or desirable to preserve, protect and maintain the security interest and Lien of the Security Agent in any Collateral held by any Person involved in any such transaction are taken to the satisfaction of the Administrative Agent and (y) no Default or Event of Default exists after giving effect thereto;
(c)following a Collateral Disposition permitted by this Agreement, the Subsidiary Guarantor that owned the Collateral Vessel that is the subject of such Collateral Disposition may dissolve (or the equivalent); provided that (x) the net cash proceeds of such Collateral Disposition shall be applied to repay the Loans to the extent required by Section 4.02(b), (y) all of the proceeds of such dissolution shall be paid only to the Borrower or a Subsidiary Guarantor and (z) no Event of Default is continuing at the time of such dissolution;
(d)the Borrower and its Subsidiaries may make dispositions of assets made in the ordinary course of trading of the disposing entity (excluding dispositions of Collateral Vessels or other Collateral) including without limitation, the payment of cash as consideration for the purchase or acquisition of any asset or service or in the discharge of any obligation incurred for value in the ordinary course of trading;
(e)the Borrower and its Subsidiaries may make dispositions of assets (other than the Collateral Vessels or other Collateral) owned by them in exchange for other assets comparable or superior as to type and value;
(f)the Borrower and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale); and
(g)the Borrower may consolidate or merge with any other Person if (A) at the time of such transaction and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (or would arise after giving effect to such transaction), (B) the surviving entity in such transaction shall be the Borrower, (C) such Person are in the same or related business as the Obligors that is otherwise permitted by Section 8.11, (D) at the time of such transaction, the Borrower shall be in pro

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forma compliance with the Financial Covenants, (E) all representations and warranties set forth in Section 6 and in each other Credit Document shall be true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality, in all respects) on and as of the date of such transaction and (F) the Borrower shall have delivered to the Administrative Agent, not less than ten (10) Business Days in advance of such consolidation or merger, an officer’s certificate signed by a senior financial officer, certifying compliance with preceding clauses (A) through (E) (and setting forth in reasonable detail calculations demonstrating compliance with preceding clause (D)).; and
(h)the Borrower and each of its Subsidiaries may dispose of the Specified Exchange Collateral Vessels in a Specified Exchange Transaction in compliance with Section 7.21.
To the extent the Required Lenders waive the provisions of this Section 8.02 with respect to the sale of any Collateral, or any Collateral is sold or disposed of as permitted by Sections 8.02(a) or, (c) or (h), such Collateral (unless sold or disposed of to the Borrower or a Subsidiary of the Borrower) shall be sold and disposed of free and clear of the Liens created by the Security Documents, and the Administrative Agent and Security Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.
8.03Dividends.  The Borrower will not, and will not permit any of its Subsidiaries to, authorize, declare or, pay any Dividends, except that:
(a)any Subsidiary may pay Dividends to the Borrower or to any Subsidiary of the Borrower which owns such Subsidiary;
(b)the Borrower and each of its Subsidiaries may authorize, make, pay, distribute or declare Dividends payable solely in the Equity Interests (other than Disqualified Stock) of such Person, including without limitation authorizing, declaring, and distributing a Dividend of rights to acquire Equity Interests (other than Disqualified Stock) of such Person;
(c)the Borrower may authorize, make, pay or declare cash Dividends (or repurchase or declare or make an offer to repurchase Equity Interests in cash); provided that (i) no Default or Event of Default shall have occurred and be continuing at the time of declaration or payment (or would arise after giving effect thereto) of such Dividends, (ii) the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants both immediately before and immediately after giving effect to such Dividends, and (iii) the aggregate Unrestricted Cash and Cash Equivalents held by the Borrower and its Subsidiaries shall be at least an amount equal to the greater of (x) $100,000,000 and (y) 18.75% of Total Indebtedness, in each case, both immediately before and immediately after giving effect to such Dividends;
(d)the Borrower may authorize, make, pay or declare cash Dividends (or repurchase or declare or make an offer to repurchase Equity Interests in cash); provided that (i) no Default or Event of Default shall have occurred and be continuing at the time of declaration or payment (or would arise after giving effect thereto) of such Dividends, (ii) the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants both immediately before and immediately after giving effect to such Dividends and (iii) the aggregate amount of such Dividends declared in any fiscal quarter shall not exceed 50% of Consolidated Net Income for the immediately preceding fiscal quarter; provided that the restriction set forth in this clause (iii) shall cease to be applicable for any period during which both immediately before and immediately after giving effect to such Dividends, the sum of (x) the Aggregate Appraised Value of the Collateral Vessels (which, for the avoidance of doubt, shall include any Additional Vessels) which are not the subject of a Collateral Disposition, (y) any Additional Collateral (other than any Additional Vessels) and (z) any cash collateral maintained in the Cash Collateral Account

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pursuant to Section 4.02(b)(ii)(1) is greater than 200% of the sum of (I) the aggregate outstanding principal amount of the Initial Term Loans and (II) the Delayed Draw Outstanding Amount; and
(e)to the extent constituting a Dividend, the Borrower may withhold from delivery of Equity Interests to be delivered to recipients of an award under any equity incentive plan of the Borrower a portion of such Equity Interests to satisfy the amounts of federal, state and other governmental tax withholding requirements related to such award and pay the amounts required to be withheld to the appropriate taxing authorities.
8.04Indebtedness.  (a)  The Borrower and its Subsidiaries will not contract, create, incur, assume or suffer to exist any Financial Indebtedness (other than Financial Indebtedness incurred pursuant to this Agreement and the other Credit Documents) except:
(i)Financial Indebtedness so long as at the time such Financial Indebtedness is incurred: (x) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (y) the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants;
(ii)Financial Indebtedness of the Borrower and its Subsidiaries outstanding on the Original Closing Date as set forth on Schedule VIII hereto;
(iii)Financial Indebtedness permitted under Section 8.05(c);
(iv)the Subsidiary Guarantors may issue guarantees of Financial Indebtedness permitted under Section 8.04(a)(ii); and
(v)Financial Indebtedness under the Existing Credit Agreements; provided that such Financial Indebtedness is repaid in full on the Initial Borrowing Date.
(b)Notwithstanding anything to the contrary set forth above in this Section 8.04, (i) no Subsidiary Guarantor shall incur any Financial Indebtedness for borrowed money (including Contingent Obligations in respect thereof) except for (x) Financial Indebtedness incurred pursuant to this Agreement and the other Credit Documents and (y) intercompany indebtedness permitted pursuant to Section 8.05(c), which shall be subordinated to the Secured Obligations of the respective Obligor pursuant to written subordination provisions substantially in the form of Exhibit J and (ii) except as permitted under Section 8.04(a)(ii), Section 8.04(a)(iii) and Section 8.04(a)(iv), the Subsidiary Guarantors shall not assume, incur or suffer to exist any Contingent Obligations in respect of any Financial Indebtedness of any Subsidiary of the Borrower which is not an Obligor.
8.05Advances, Investments, Loans and Vessel Acquisitions.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any Equity Interests in, or make any capital contribution to any other Person or acquire any vessel (each of the foregoing an “Investment” and, collectively, “Investments”), without the prior written consent of the Administrative Agent and the Required Lenders, except that:
(a)the Borrower and its Subsidiaries may acquire and hold accounts receivable owing to any of them;
(b)so long as no Event of Default exists or would result therefrom, the Borrower and its Subsidiaries may make loans and advances in the ordinary course of business to its employees so long

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as the aggregate principal amount thereof at any time outstanding which are in existence on or made on or after the Original Closing Date (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $500,000;
(c)the Borrower and the Subsidiary Guarantors may make intercompany loans and advances to the Borrower (in the case of the Subsidiary Guarantors) and between or among one another (including the Borrower), and Subsidiaries of the Borrower other than the Subsidiary Guarantors may make intercompany loans and advances to the Borrower or any other Subsidiary of the Borrower; provided that any loans or advances to the Borrower or any Subsidiary Guarantors pursuant to this Section 8.05(c) shall be subordinated to the Secured Obligations of the respective Obligor pursuant to written subordination provisions substantially in the form of Exhibit J;
(d)the Borrower and its Subsidiaries may sell or transfer assets to the extent permitted by Section 8.02;
(e)additional Investments by the Borrower and its Subsidiaries, subject to (i) no Event of Default having occurred or being continuing both before and after giving effect thereto and (ii) both immediately before and immediately after giving effect to such Investment, the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants; and
(f)the Borrower may consummate the Scrubber Acquisitions; and
(g)(f) the Borrower and its Subsidiaries may consummate the Scrubber AcquisitionsSpecified Exchange Transactions in accordance with the requirements of Section 7.21.
8.06Transactions with Affiliates.  The Borrower will not, and will not permit any of its Subsidiary Guarantors to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of such Person, other than on terms and conditions no less favorable to such Person as would be obtained by such Person at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except that:
(a)Dividends may be paid to the extent provided in Section 8.03;
(b)loans and Investments may be made (including, in each case, repayments thereof) and other transactions may be entered into between the Borrower and its Subsidiaries to the extent not prohibited by Sections 8.04 and 8.05;
(c)the Borrower and its Subsidiary Guarantors may pay customary director’s fees;
(d)the Borrower and its Subsidiary Guarantors may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;
(e)the Borrower may pay management fees to direct or indirect Wholly-Owned Subsidiaries in the ordinary course of business; and
(f)The Borrower may pay any fees or other amounts to its Affiliates as expressly permitted by Sections 8.03, 8.05 and this Section 8.06.
8.07Financial Covenants.

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(a)Minimum Liquidity.  The Borrower will not permit the aggregate of all Unrestricted Cash and Cash Equivalents held by the Borrower and its Subsidiaries at any time to be less than an amount equal to the greater of (x) $30.0 million and (y) 7.5% of Total Indebtedness.
(b)Minimum Working Capital.  The Borrower will not permit the consolidated current assets (determined on a consolidated basis in accordance with GAAP, but excluding Restricted Cash and Cash Equivalents) of the Borrower and its Subsidiaries less consolidated current liabilities (determined on a consolidated basis in accordance with GAAP, but excluding the current portion of long-term Financial Indebtedness) of the Borrower and its Subsidiaries to be less than $0 at all times, which shall be tested as of the last day of each fiscal quarter.
(c)Debt to Capitalization Ratio.  The Borrower will maintain a ratio of Total Indebtedness to Total Capitalization of not greater than 0.70 to 1:00 at all times, which shall be tested as of the last day of each fiscal quarter.
(d)Collateral Maintenance.  The Borrower will not permit the sum of (i) the Aggregate Appraised Value of the Collateral Vessels (which, for the avoidance of doubt, shall include any Additional Vessels) which are not the subject of a Collateral Disposition, (ii) any Additional Collateral (other than any Additional Vessels) and (iii) any cash collateral maintained in the Cash Collateral Account pursuant to Section 4.02(b)(ii)(1) to be less than an amount equal to 135% of the aggregate outstanding principal amount of the Loans at all times (the “Collateral Maintenance Test”); provided that any non-compliance with this Section 8.07(d) shall not constitute an Event of Default (but shall constitute a Default), so long as within 30 days of the date of such non-compliance, the Borrower shall either (x) post Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepay the Loans on a pro rata basis in an amount sufficient to cure such non-compliance; provided, further, that the Security Agent shall (and the Lenders hereby authorize the Security Agent to), upon the request of the Borrower, release any Additional Collateral, terminate the related Security Documents (including any related Guaranty) solely with respect to such Additional Collateral if the Additional Collateral Release Conditions shall have been satisfied.
(e)Changes to GAAP. If at any time after the Original Closing Date, the GAAP requirements materially change so as to impact the Financial Covenants set forth in Sections 8.07(a), (b), (c) and (d), and if agreed between the Borrower and the Administrative Agent (acting upon the written consent of the Required Lenders), this Agreement shall be amended and/or supplemented to reflect such changes.  If no such agreement is made, the GAAP requirements prior to any such change shall apply in determination of the Financial Covenants.
8.08Limitation on Modifications of Certain Documents; etc.  (a)  The Borrower will not, and the Borrower will not permit any Subsidiary Guarantor to, amend, modify or change its Organizational Documents or any agreement entered into by it with respect to its Equity Interests, or enter into any new agreement with respect to its Equity Interests, other than any amendments, modifications or changes or any such new agreements which are not in any way materially adverse to the interests of the Lenders.
(b)The Borrower or relevant Collateral Vessel Owner party to any Technical Management Agreement or charter will not agree to any amendments thereto or grant any waiver thereunder, in each case, which would be materially adverse to the interests of the Lenders, without the consent of the Administrative Agent.

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8.09Limitation on Certain Restrictions on Subsidiaries.  The Borrower will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay Dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Borrower or any such Subsidiary, or pay any Financial Indebtedness owed to the Borrower or a Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary or (c) transfer any of its properties or assets to the Borrower or any such Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or a Subsidiary of the Borrower, (iv) customary provisions restricting assignment of any agreement (including a ship purchase agreement) entered into by the Borrower or a Subsidiary in the ordinary course of business, (v) any holder of a Lien on assets other than the Collateral may restrict the transfer of the asset or assets subject thereto and (vi) restrictions which are not more restrictive than those contained in this Agreement.
8.10Limitation on Issuance of Capital Stock.  The Borrower will not permit any Subsidiary Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except (i) for transfers and replacements of then outstanding shares of capital stock, (ii) for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the capital stock of such Subsidiary, (iii) in the case of foreign Subsidiaries of the Borrower, to qualify directors to the extent required by applicable law, (iv) to the Borrower or another Subsidiary Guarantor.  All capital stock of any Subsidiary Guarantor issued in accordance with this Section 8.10 shall be delivered to the Security Agent pursuant to the Pledge Agreement.
8.11Business.  (a)  The Borrower and its Subsidiaries will not engage in any business other than the businesses in which any of them is engaged in as of the Original Closing Date (or, in the case of any Subsidiary that is formed or incorporated after the Original Closing Date, any business in which the Borrower, any other Subsidiary is engaged as of the Original Closing Date) and activities directly related thereto, and similar or related maritime businesses.
(b)The Borrower and Subsidiary Guarantors will not engage in any operating or business activities other than: (i) ownership, management or operation of the Collateral Vessels and, with respect to the Borrower, the other Fleet Vessels, (ii) maintenance of legal existence (including the ability to incur fees, costs, expenses and taxes relating to such management), (iii) the entering into and performance of its obligations under this Agreement and the other Credit Documents and its Organizational Documents, (iv) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group of the Borrower and its Subsidiaries, (v) holding any cash, Cash Equivalents and other property necessary or desirable in connection with or incidental to, the ownership, management and operation of the Collateral Vessels and, with respect to the Borrower, the other Fleet Vessels, (vi) payment of Dividends, incurring Financial Indebtedness, making Investments and engaging in any other activities to the extent permitted hereunder and under the other Credit Documents, (vii) providing indemnification to officers and directors, (viii) any activities incidental or reasonably related to the foregoing and (ix) owning the Equity Interests in any of their respective Subsidiaries.
8.12Manager.  The Borrower and the Subsidiary Guarantors shall not, without the prior written consent of the Administrative Agent (such consent not be unreasonably withheld or delayed), (i) change the Technical Manager of any Collateral Vessel unless such Technical Manager is replaced within 30 days by another Technical Manager in compliance with the definition of “Technical Manager” or (ii) change the Commercial Manager unless such Commercial Manager is replaced within 30 days by another Commercial Manager in compliance with the definition of “Commercial Manager”.

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8.13Bank Accounts.  The Borrower will not permit any Subsidiary Guarantor to maintain any deposit, savings, investment or other similar accounts other than the Earnings Accounts.
8.14Jurisdiction of Employment.  The Borrower will not, and will not permit the Subsidiary Guarantors or any third party charterer of a Collateral Vessel to employ or cause to be employed any Collateral Vessel in any country or jurisdiction in which the Borrower, the Subsidiary Guarantors or such third party charterer of a Collateral Vessel is prohibited by law from doing business, (ii) the Lien created by the applicable Collateral Vessel Mortgage will be rendered unenforceable or (iii) the Security Agent’s foreclosure or enforcement rights will be materially impaired or hindered.
8.15Operation of Collateral Vessels.  The Borrower will not, and will not permit any Subsidiary Guarantor to:
(a)without giving prior written notice thereof to the Security Agent, change the registered owner, name, official or patent number, as the case may be, the home port or class of any Collateral Vessel; and
(b)without the prior consent of the Administrative Agent (or, in the case of the registry, each Lender) (such consent not to be unreasonably withheld), change the registered flag registry or classification society of any Collateral Vessel unless the change is to an Acceptable Flag Jurisdiction (and the requirements of the Flag Jurisdiction Transfer have been satisfied) or to an Acceptable Classification Society.
8.16Corrupt Practices.  The Borrower and each Obligor shall not use any part of the proceeds of the Loans, directly or, to the knowledge of any Obligor, indirectly, in furtherance of an offer, payment, promise to pay, or authorization of a payment of giving of money, or anything of value, to a Foreign Official or any person, in order to obtain, retain or direct business or obtain any improper advantage, in violation of Anti-Corruption Laws.
8.17No Investments.  The Borrower and each Obligor shall not use any Investments, directly or, to the knowledge of any Obligor, indirectly, to or for the benefit of a Restricted Party in violation of Sanctions Laws nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws.
8.18[Reserved].
8.19Hedging Agreements.  The Borrower will not and will not permit any Subsidiary Guarantor to enter into Hedging Agreements or other hedging or similar agreements other than (i) Hedging Agreements and (ii) other hedging or similar agreements meant (as to this clause (ii)) to hedge against the price of commodities (including bunkers or fuel and including any bunker or fuel spread transactions), in each case entered into in the ordinary course of business and not for speculative purposes; provided that the Borrower may only enter into and remain liable under Secured Hedging Agreements entered into with a Lender or an Affiliate of a Lender with respect to the Collateral Vessels or the obligations of the Borrower and each other Obligor under this Agreement; provided, further, that the obligations of the Borrower under any Secured Hedging Agreements are

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fully subordinated to its obligations hereunder on terms satisfactory to the Administrative Agent and the Subsidiary Guarantors may guarantee the obligations thereunder.
SECTION 9Events of Default.  Each of the following shall constitute an “Event of Default” for purposes of this Agreement and the other Credit Documents:
9.01Payments.  The Borrower shall (i) default in the payment when due of any principal or interest payable in connection with the Loans or any Note or (ii) default in the payment when due of any other sums payable under a Credit Document or under any document relating to a Credit Document or, in the case of sums payable on demand, within five (5) Business Days after the date when first demanded; provided that if such failure to pay a sum when due is solely the result of an administrative or technical error, it shall not constitute an Event of Default unless such failure continues unremedied for more than three (3) Business Days; or
9.02Representations, etc.  Any representation, warranty or statement made by any Obligor herein or in any other Credit Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or
9.03Covenants.  Any Obligor shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Sections 7.01(f)(i), 7.03 (other than clause (a)(i) or (iv) thereof), 7.05(a)(iii), 7.06, 7.15(b), 7.19 or Section 8.07 or (ii) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or any other Credit Document to which it is a party and, in the case of this clause (ii), such default shall continue unremedied for a period of 30 days after written notice to the Borrower by the Administrative Agent; or
9.04Default Under Other Agreements.  (i) The Borrower or any of its Subsidiaries shall default in any payment of any Financial Indebtedness (other than the Credit Document Obligations) beyond the original period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created or (ii) the Borrower or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Financial Indebtedness (other than the Credit Document Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Financial Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Financial Indebtedness to become due prior to its stated maturity or (iii) any Financial Indebtedness (other than the Credit Document Obligations) of the Borrower or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid other than by (x) a regularly scheduled required prepayment or (y) in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment, prior to the stated maturity thereof; provided that it shall not be a Default or Event of Default under this Section 9.04 unless the aggregate principal amount of all Financial Indebtedness as described in preceding clauses (i) through (iii), inclusive, exceeds $7,500,000; or
9.05Bankruptcy, etc.  The Borrower, any of its Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”) or any other Debtor Relief Law; or an involuntary proceeding is commenced against the Borrower or any of its Subsidiaries under any Debtor Relief Law which is not controverted within 30 days after service of summons (or such longer period as may be provided by such summons), or is not dismissed within 60

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days, after commencement of the proceeding; or a receiver, custodian, trustee, examiner, liquidator or similar official is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any of its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any of its Subsidiaries or there is commenced against the Borrower or any of its Subsidiaries any such proceeding which remains undismissed for a period of 60 days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or any of its Subsidiaries suffers any appointment of any receiver, custodian, trustee, examiner, liquidator or similar official or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Borrower or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by the Borrower or any of its Subsidiaries for the purpose of effecting any of the foregoing; or
9.06ERISA.  If:
(a)(i)any Plan (other than a Multiemployer Plan) shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 of ERISA;
(ii)a Reportable Event shall have occurred;
(iii)a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (which is not waived) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days;
(iv)any Plan (other than a Multiemployer Plan) which is subject to Title IV of ERISA shall have had or is reasonably likely to have a trustee appointed to administer such Plan;
(v)any Plan which is subject to Title IV of ERISA is, or shall have been, terminated or the subject of termination proceedings under ERISA;
(vi)a contribution required to be made by the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan subject to Title IV of ERISA or by the Borrower or any of its Subsidiaries with respect to a Foreign Pension Plan is not timely made;
(vii)any Plan (other than a Multiemployer Plan) shall have an Unfunded Current Liability;
(viii)the Borrower or any of its Subsidiaries or any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan subject to Title IV of ERISA;

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(ix)the Borrower or any of its Subsidiaries or any ERISA Affiliate has or is reasonably likely to have any liability to or on account of a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4975 of the Code; or
(x)a “default,” within the meaning of Section 4219(c)(5) of ERISA, shall occur with respect any Multiemployer Plan;
(b)there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material and impending risk of incurring a liability; and
(c)such lien, security interest or liability, individually, and/or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect; or
9.07Security Documents.  At any time after the execution and delivery thereof, any of the Security Documents shall, other than in accordance with the terms hereof or thereof, cease to be in full force and effect, or shall cease in any material respect to give the Security Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Lien on, all of the Collateral), in favor of the Security Agent, superior to and prior to the rights of all third Persons (except in connection with Permitted Liens), and subject to no other Liens (except Permitted Liens), or any Obligor shall default in the due performance or observance of any term, covenant or agreement on is part to be performed or observed pursuant to any of the Security Documents and such default shall continue beyond any original period of grace (if any) specifically applicable thereto pursuant to the terms of such Security Document or any “event of default” (as defined in any Collateral Vessel Mortgage) shall occur in respect of any Collateral Vessel Mortgage; or
9.08Guaranty.  After the execution and delivery thereof, any Guaranty, or any provision thereof, shall cease to be in full force or effect as to the relevant Subsidiary Guarantor (unless such Subsidiary Guarantor is no longer a Subsidiary of the Borrower by virtue of a liquidation, sale, merger or consolidation permitted by Section 8.02) or any Subsidiary Guarantor (or Person acting by or on behalf of such Subsidiary Guarantor) shall deny or disaffirm such Subsidiary Guarantor’s obligations under the Guaranty to which it is a party or any Subsidiary Guarantor shall default in the due performance or observance of any term, covenant or agreement on is part to be performed or observed pursuant to the Guaranty to which it is a party and such default shall continue beyond any original period of grace (if any) specifically applicable thereto pursuant to the terms of such Guaranty; or
9.09Judgments.  One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving in the aggregate for the Borrower and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of sixty (60) Business Days, and the aggregate amount of all such judgments, to the extent not covered by insurance, exceeds the Materiality Amount; or
9.10Termination of Business.  Any Obligor ceases or suspends or threatens to cease or suspend the carrying on of its business, or a part of its business (in each case other than in connection with dry dockings, maintenance of the Collateral Vessel and other temporary suspensions of operations in the ordinary course of business) which, in the opinion of the Required Lenders, is material in the context of this Agreement; or

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9.11Authorizations and Consents.  Any consent necessary to enable a Collateral Vessel Owner to own, operate or charter the Collateral Vessel owned by it or to enable the Borrower or any other Obligor to comply with any provision which the Required Lenders consider material of a Credit Document is not granted, expires without being renewed, is revoked or becomes liable to be revoked or any condition of such a consent is not fulfilled, unless cured within thirty (30) Business Days; or
9.12Arrest; Expropriation.  All or a material part of the undertakings, assets, rights or revenues of, or shares or other ownership interest in, any Obligor are arrested, seized, nationalized, expropriated or compulsorily acquired by or under the authority of any government, unless cured within thirty (30) Business Days, and provided that in the reasonable opinion of the Administrative Agent, such occurrence would adversely affect any Obligor’s ability to perform its obligations under the Credit Documents to which it is a party; or
9.13Failure to Comply with Final Judgment.  The Borrower or any of its Subsidiaries fail to comply with a final judgment issued by any court of competent jurisdiction; or
9.14[Reserved].
9.15Change of Control.  There occurs any Change of Control.
Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent may, and upon the written request of the Required Lenders, shall, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Obligor (provided that, if an Event of Default specified in Section 9.05 shall occur, the result which would occur upon the giving of written notice by the Administrative Agent to the Borrower as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Commitments terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Commission shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of the Loans, Notes and all Credit Document Obligations owing hereunder or thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; or (iii) enforce, as Security Agent, all of the Liens and security interests created pursuant to the Security Documents. Notwithstanding the foregoing, in no event shall the Administrative Agent be required to deliver written notice to the Borrower prior to taking any action described in clause (iii) of this paragraph.
SECTION 10Agency and Security Trustee Provisions.
10.01Appointment.  (a)  The Lenders in their capacity as Lenders and Other Creditors (by their acceptance of the benefits hereof and of the other Credit Documents) hereby irrevocably designate and appoint Nordea, as Administrative Agent (for purposes of this Section 10 the term “Administrative Agent” shall include Nordea (and/or any of its affiliates) in its capacity as Security Agent pursuant to the Security Documents and in its capacity as mortgagee (if applicable) and security trustee pursuant to the Collateral Vessel Mortgages) to act as specified herein and in the other Credit Documents.  Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Agents to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of such Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto.  The Agents may perform any of their duties

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hereunder by or through its respective officers, directors, agents, employees or affiliates and, may assign from time to time any or all of its rights, duties and obligations hereunder and under the Security Documents to any of its banking affiliates.
(b)The Lenders hereby irrevocably designate and appoint Nordea as security trustee solely for the purpose of holding legal title to the Collateral Vessel Mortgages on each of the Collateral Vessels in an Acceptable Flag Jurisdiction on behalf of the Lenders, from time to time, with regard to the (i) security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or pursuant to the Collateral Vessel Mortgages (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken by any Lender in the Collateral Vessel Mortgages), (ii) all money, property and other assets paid or transferred to or vested in any Lender or any agent of any Lender or received or recovered by any Lender or any agent of any Lender pursuant to, or in connection with the Collateral Vessel Mortgages, whether from the Borrower or any Subsidiary Guarantor or any other Person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Lender or any agent of any Lender in respect of the same (or any part thereof).  Nordea hereby accepts such appointment as security trustee.
10.02Nature of Duties.  (a)  The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement and the Security Documents.  None of the Agents nor any of their respective officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by such Person’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision (any such liability limited to the applicable Agent to whom such Person relates).  The duties of each of the Agents shall be mechanical and administrative in nature; none of the Agents shall have by reason of this Agreement or any other Credit Document any fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon any Agents any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.
(b)It is understood and agreed that the use of the term “agent” herein or in any other Credit Documents (or any other similar term) with reference to the Administrative Agent in such capacity is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
(c)No Agent, in its capacity as such, shall have any responsibility, duty or liability for monitoring or enforcing the list of Disqualified Lender or for any assignment of any Loan or Commitment or for the sale of any participation, in either case, to a Disqualified Lender.
10.03Lack of Reliance on the Agents.  Independently and without reliance upon the Agents, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Borrower and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Borrower and its Subsidiaries and, except as expressly provided in this Agreement, none of the Agents shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with

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respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter.  None of the Agents shall be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrower and its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Borrower and its Subsidiaries or the existence or possible existence of any Default or Event of Default.
10.04Certain Rights of the Agents.  If any of the Agents shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Agents shall be entitled to refrain from such act or taking such action unless and until the Agents shall have received instructions from the Required Lenders; and the Agents shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender or the holder of any Note shall have any right of action whatsoever against the Agents as a result of any of the Agents acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.
10.05Reliance.  Each of the Agents shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, email, or telecopier message, order or other document or telephone message signed, sent or made by any Person that the applicable Agent reasonably believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.
10.06Indemnification.  To the extent any of the Agents is not reimbursed and indemnified by the Borrower, the Lenders severally agree to reimburse and indemnify the applicable Agents, pro rata to their respective Commitments for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Agents in performing their respective duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document (including, without limitation, as a result of a breach of any Sanctions Laws by any Obligor or their respective directors, officers, employees, agents or representatives); provided that no Lender shall be liable in respect to an Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).  The indemnities contained in this Section 10.06 shall cover any cost, loss or liability incurred by each Indemnified Party in any jurisdiction arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
10.07The Administrative Agent in its Individual Capacity.  With respect to its obligation to make the Loans under this Agreement, each of the Agents shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lenders,” “Secured Creditors”, “Required Lenders”, “holders of Notes” or any similar terms shall, unless the context clearly otherwise indicates, include each of the Agents in their respective individual capacity.  Each of the Agents may accept deposits from, lend money to,  and generally engage in any kind of banking, trust or other business

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with any Obligor or any Affiliate of any Obligor as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrower or any other Obligor for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.
10.08Holders.  The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent.  Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.
10.09Resignation by the Administrative Agent.
(a)The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving thirty (30) Business Days’ prior written notice to the Borrower and the Lenders or appoint one of its Affiliates, as a successor by giving five (5) Business Days’ prior written notice to the Borrower and the Lenders.  A resignation by the Administrative Agent without the appointment of an Affiliate as successor as contemplated herein shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b)Upon a notice of resignation delivered by the Administrative Agent pursuant to Section 10.09(a), the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company that is, unless an Event of Default has occurred and is continuing at such time, reasonably acceptable to the Borrower.
(c)If, following the Administrative Agent delivering a notice of resignation pursuant to Section 10.09(a), a successor Administrative Agent shall not have been so appointed within such thirty (30) Business Day period, the Administrative Agent, with the consent of the Borrower (which shall not be unreasonably withheld or delayed and shall not be required if an Event of Default is continuing at such time), shall then appoint a commercial bank or trust company with capital and surplus of not less than $500,000,000 as successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.
(d)If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the twenty fifth (25th) Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.
10.10Collateral Matters.  (a)  Each Lender authorizes and directs the Security Agent to enter into the Security Documents for the benefit of the Lenders and the other Secured Creditors.  Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders.  The Security

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Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to, or during, an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Security Documents.
(b)The Lenders hereby authorize the Security Agent, at its option and in its discretion, to release any Lien on any property granted to or held by the Security Agent under any Credit Document (i) upon payment and satisfaction in full in cash of the Credit Document Obligations (other than contingent indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) that is sold or otherwise disposed of (to Persons other than the Borrower and its Subsidiaries) upon the sale or other disposition thereof in compliance with Section 8.02, (iii) in connection with any Flag Jurisdiction Transfer; provided that the requirements thereof are satisfied by the relevant Obligor, and (iv) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.13) or (v) as otherwise may be expressly provided in the relevant Security Documents.  Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Security Agent’s authority to release its interest in particular types or items of Collateral pursuant to this Section 10.10.
(c)The Lenders hereby agree to, and direct the Administrative Agent and the Security Agent to, automatically release any Subsidiary Guarantor from the Guaranty (i) upon payment and satisfaction of all of the Credit Document Obligations (other than inchoate indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) that is wound up, liquidated, dissolved, merged consolidated or amalgamated in compliance with Section 8.02, (iii) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.13) or (iv) as otherwise may be expressly provided in the Guaranty.
(d)The Security Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Obligor or is cared for, protected or insured or that the Liens granted to the Security Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Security Agent in this Section 10.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Security Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
(e)(i)The Other Creditors shall not have any right whatsoever to do any of the following: (A) exercise any rights or remedies with respect to the Collateral or to direct any Agent to do the same, including, without limitation, the right to (1) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (2) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election or make collections with respect to all or any portion of the Collateral or (3) release any Obligor under any Credit Document or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (B) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, the Credit Documents); (C) vote in any case concerning any Obligor under the Bankruptcy Code or any other proceeding under any reorganization, arrangement, adjudication of debt, relief of debtors, dissolution, insolvency, liquidation or similar proceeding in respect of the Obligors or any of their respective Subsidiaries (any such proceeding, for purposes of this clause (e)(i), a “Bankruptcy Proceeding”) with

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respect to, or take any other actions concerning the Collateral; (D) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (E) oppose any sale, transfer or other disposition of the Collateral; (F) object to any debtor-in-possession financing in any Bankruptcy Proceeding which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (G) object to the use of cash collateral in respect of the Collateral in any Bankruptcy Proceeding; or (H) seek, or object to the Lenders or any Agent seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy Proceeding.
(ii)Each Other Creditor, by its acceptance of the benefits of this Agreement and the other Credit Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Agents and the Lenders may enforce the provisions of the Credit Documents and exercise remedies thereunder (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment.  Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the UCC.  The Other Creditors by their acceptance of the benefits of this Agreement and the other Credit Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral.  Whether or not a Bankruptcy Proceeding has been commenced, the Other Creditors shall be deemed to have consented to any sale or other disposition of any property, business or assets of the Obligors and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.
(iii)To the maximum extent permitted by law, each Other Creditor waives any claim it might have against the Agents or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of any Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Credit Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Section 10.10(e)(ii)), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.  To the maximum extent permitted by applicable law, none of either Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower, any Subsidiary of the Borrower, any Other Creditor or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.
10.11Certain ERISA Matters.  Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto and (y) covenants, from the date such Person became a Lender party hereto, to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, the Lead Arrangers and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan party, that such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans or Commitments.
10.12Delivery of Information.  The Agents shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Agents from any Obligor, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document

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except (i) as specifically provided in this Agreement or any other Credit Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of any Agent at the time of receipt of such request and then only in accordance with such specific request.
SECTION 11Miscellaneous.
11.01Payment of Expenses, etc (a)  The Borrower shall pay (i) all reasonable and documented out-of-pocket costs and expenses of each of the Agents and their Affiliates (which shall be limited, in the case of legal fees, to the reasonable and documented fees and disbursements of one legal counsel to the Administrative Agent and the Lead Arrangers, and local counsel (as necessary) to the Administrative Agent) in connection with the syndication of the Credit Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto (whether or not the transactions herein contemplated are consummated) and (ii) all reasonable and documented out-of-pocket costs and expenses of each of the Agents and the Lenders (including, without limitation, the reasonable fees, charges and disbursements of any counsel (excluding in-house counsel) for each of the Agents and for each of the Lenders) in connection with the enforcement or protection of its rights (A) in connection this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and (B) in connection with the Loans made hereunder, including such expenses incurred during any workout, restructuring or negotiations in respect of the Loans.
(b)In addition, the Borrower shall indemnify the Agents, each Lender and their respective Affiliates, and each of their respective officers, directors, trustees, employees, representatives and agents (collectively, the “Indemnified Parties”) from, and hold each of them harmless against, any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, suits and out-of-pocket costs, expenses and disbursements (including reasonable and documented out-of-pocket attorneys’ and consultants’ fees, charges and disbursements) incurred by, imposed on or assessed against any of them by any Person (including the Borrower or any other Obligor) other than such Indemnified Party and its Affiliates, officers, directors, trustees, employees, representatives and agents as a result of, or arising out of, or in any way related to, or by reason of:
(i)(w) to the execution, delivery or performance of this Agreement or any other Credit Document, or any agreement or instrument contemplated hereby or thereby, (x) the use of proceeds of the Loans hereunder, (y) the consummation of any transactions contemplated herein or in any other Credit Document, or in any agreement or instrument contemplated hereby or thereby, or (z) the exercise of any of their rights or remedies provided herein or in any other Credit Document, or in any agreement or instrument contemplated hereby or thereby,
(ii)the actual or alleged presence of Hazardous Materials on or from any Collateral Vessel or Real Property or facility at any time owned, operated or occupied by the Borrower or any Subsidiary,
(iii)the generation, storage, transportation, handling, disposal or Release of Hazardous Materials at any location, whether or not owned or operated by the Borrower,
(iv)the actual or alleged non-compliance of any Collateral Vessel or any Real Property or facility or vessel at any time owned, operated or occupied by the Borrower or any Subsidiary with Environmental Law, ISM Code, ISPS Code or applicable foreign, federal,

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state and local laws, regulations, and ordinances (including applicable permits thereunder) and any law relating to safety at sea,
(v)any Environmental Claim asserted any Agent, any Lender, the Borrower, any Subsidiary Guarantor or any Collateral Vessel or any Real Property or facility at any time owned or operated by the Borrower or any Subsidiary,
(vi)conduct of any Obligor or any of its partners, directors, officers or employees, that violates any Sanctions Laws, or
(vii)any actual or prospective claim, investigation, litigation or other proceeding (whether or not any of the Agents, the Security Agent, any Lender or any other Indemnified Party is a party thereto) related to any of the foregoing, whether based on contract, tort or any other theory,
in each case excluding any losses, liabilities, claims, damages, penalties, actions, judgments, suits, costs, disbursements or expenses to the extent incurred, as determined by a court of competent jurisdiction by final and non-appealable judgment, by reason of the gross negligence of, the breach in bad faith of the Credit Documents by, or wilful misconduct of, any such Indemnified Party.  To the extent that the undertaking to indemnify, pay or hold harmless each of the Agents or any Lender set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law.  Notwithstanding the foregoing, no party hereto shall be responsible to any Person for any consequential, indirect, special or punitive damages which may be alleged by such Person arising out of this Agreement or the other Credit Documents or any agreement or instrument contemplated hereby, there transactions contemplated hereby or thereby, the Loans or the use of the proceeds thereof; provided that this sentence shall not limit the Borrower’s indemnification obligations set forth in this clause (b).
11.02Right of Setoff.  In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, each Lender and each of its Affiliates is hereby authorized at any time or from time to time, to the fullest extent permitted by applicable law, without presentment, demand, protest or other notice of any kind to any Subsidiary or the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in any currency) and any other Financial Indebtedness at any time held or owing by such Lender (including, without limitation, by Affiliates, branches and agencies of such Lender wherever located) to or for the credit or the account of the Borrower or any Subsidiary Guarantor, but in any event excluding assets held in trust for any such Person, against and on account of the Credit Document Obligations and liabilities of the Borrower or such Subsidiary Guarantor, as applicable, to such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Credit Document Obligations purchased by such Lender pursuant to Section 11.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Credit Document Obligations, liabilities or claims, or any of them, shall be contingent or unmatured.  The rights of each Lender and its respective Affiliates under this Section 11.02 are in addition to other rights and remedies (including other rights of setoff) that such Lender and its Affiliates may have.  Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such

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setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
11.03Notices.  Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopier or e-mail communication) and mailed, e-mailed, telecopied or delivered:  if to the Borrower, at the Borrower’s address specified on Schedule VII hereto; if to any Lender, at its address specified opposite its name on Schedule II hereto; and if to the Administrative Agent, at its Notice Office; or, as to any other Obligor, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Administrative Agent.  All such notices and communications shall, (i) when mailed, be effective three (3) Business Days after being deposited in the mails, prepaid and properly addressed for delivery, (ii) when sent by overnight courier, be effective one (1) Business Day after delivery to the overnight courier prepaid and properly addressed for delivery on such next Business Day or (iii) when sent by telecopier or e-mail, be effective when sent by telecopier or e-mail, except that notices and communications to the Administrative Agent shall not be effective until received by the Administrative Agent.  Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.
11.04Benefit of Agreement; Assignments; Participations.  (a)  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, that (i) no Obligor may assign or transfer any of its rights, obligations or interest hereunder or under any other Credit Document without the prior written consent of the Lenders, (ii) although any Lender may grant participations in its rights hereunder to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrower or any of the Borrower’s Affiliates or Subsidiaries), such Lender shall remain a Lender for all purposes hereunder (and may not transfer or assign all or any portion of its Commitments hereunder except as provided in Section 11.04(b)), no participant shall constitute a Lender hereunder, and such Lender shall remain solely responsible to the other parties hereto for the performance of such Lender’s obligations under this Agreement and (iii) no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (x) extend the final scheduled maturity of the Loans or any Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or Commitment Commission thereon (except (I) in connection with a waiver of applicability of any post-default increase in Interest Rates and (II) that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (x)) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitments shall not constitute a change in the terms of such participation, and that an increase in any Commitment or the Loans shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (y) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (z) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) securing the Loans hereunder in which such participant is participating.  In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.  Each Lender that sells a participation shall, acting solely for

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this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in such Loan or other obligations under the Note (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Note) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(b)Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may:
(x)assign all or a portion of any of its Commitments and/or its outstanding share of the Loans to (i) its parent company and/or any Affiliate, subsidiary or branch of such Lender or its parent company or company controlled by or part of the same group as, such Lender, (ii) a fund or a trust which is managed or administered or advised directly or indirectly by its parent company and/or any Affiliate, subsidiary or branch of such Lender or its parent company or company controlled by or part of the same group as, such Lender or (iii) to one or more Lenders, or
(y)assign all, or if less than all, a portion equal to at least $10,000,000 (or such lower amount as the Borrower and Administrative Agent shall agree) in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and outstanding principal amount of any Loan hereunder to one or more Eligible Transferees (treating any fund that invests in bank loans and any other fund that invests in bank loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Transferee), with prior written notice to the Borrower; provided that unless an Event of Default has occurred and is continuing, no assignment to a Disqualified Lender shall be permitted to be made;
provided that (i) at such time Schedule I-A or Schedule I-B hereto, as applicable, shall be deemed modified to reflect the Commitments (and/or outstanding amount of the applicable Loan, as the case may be) of such new Lender and of the existing Lenders, (ii) new Notes will be issued, at the Borrower’s expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.04 (with appropriate modifications) to the extent needed to reflect the revised Commitments (and/or outstanding amount of the applicable Loan, as the case may be), (iii) the consent of the Administrative Agent shall be required in connection with any assignment pursuant to preceding clause (y) (which consent shall not be unreasonably withheld or delayed and which shall be subject only to the Administrative Agent’s receipt of satisfactory “know your customer” documentation on the transferee, (iv) each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement and (v) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $5,000. To the extent of any assignment pursuant to this Section 11.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments (it being understood that the indemnification provisions under this Agreement (including, without limitation, Sections 2.08, 2.09, 4.04 and 11.01) shall

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survive as to such assigning Lender with respect to matters occurring prior to the date such assigning Lender ceases to be a Lender).  To the extent that an assignment of all or any portion of a Lender’s Commitments and related outstanding Credit Document Obligations pursuant to Section 2.11 or this Section 11.04(b) would, at the time of such assignment, result in increased costs under Section 2.08, 2.09 or 4.04 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from any Change in Law after the date of the respective assignment).  To the extent a Lender assigns a portion of its Commitments and/or its outstanding amount of any Loan pursuant to this Section 11.04(b), such partial assignment shall be made as an assignment of a proportionate part of all such Lender’s rights and obligations under this Agreement with respect to the assigned share of such Loan and/or such Commitment.
(c)Nothing in this Agreement shall prevent or prohibit any Lender from pledging its share of the Loans and Notes hereunder to a Federal Reserve Bank or other central bank in support of borrowings made by such Lender from such Federal Reserve Bank or other central bank and, with the consent of the Administrative Agent, any Lender which is a fund may pledge all or any portion of its Notes or share of the Loans to a trustee for the benefit of investors and in support of its obligation to such investors; provided, however, no such pledge shall release a Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.
(d)Notwithstanding anything to the contrary contained in this Section 11.04, no assignment shall be made to (i) the Borrower or any Obligor or any of their respective Affiliates or Subsidiaries, (ii) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof or (iii) a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).
(e)The Agents shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Lenders. Without limiting the generality of the foregoing, the Administrative Agent (and its sub-agents) shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Lender or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Lender.
11.05No Waiver; Remedies Cumulative.  No failure or delay on the part of the Administrative Agent or any Lender or any holder of any Note in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower or any other Obligor and the Administrative Agent or any Lender or the holder of any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder.  The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent or any Lender or the holder of any Note would otherwise have.  No notice to or demand on any Obligor in any case shall entitle any Obligor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or any Lender or the holder of any Note to any other or further action in any circumstances without notice or demand.
11.06Payments Pro Rata.  (a)  Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the

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Borrower in respect of any Credit Document Obligations hereunder, it shall distribute such payment to the Lenders (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their respective shares, if any, of the Credit Document Obligations with respect to which such payment was received.
(b)Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, any Loan or Commitment Commission, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Credit Document Obligation then owed and due to such Lender bears to the total of such Credit Document Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess Credit Document payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Obligor to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest; provided, further, that this clause (b) shall not apply to any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of the Loans.
(c)Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 11.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
11.07Calculations; Computations.  (a)  The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with generally accepted accounting principles in the United States consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Lenders).  In addition, all computations determining compliance with the Financial Covenants shall utilize accounting principles and policies in conformity with those in effect on the Original Closing Date (with the foregoing generally accepted accounting principles herein called “GAAP”), subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.  Unless otherwise noted, all references in this Agreement to “GAAP” shall mean generally accepted accounting principles as in effect in the United States.
(b)All computations of interest for the Loans, Commitment Commission and other Fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, Commitment Commission or Fees are payable.
11.08Agreement Binding.  The Borrower and each other Obligor agree that they shall be bound by the terms of this Agreement and the obligations and covenants expressed to be binding on each of them under this Agreement even if the terms, covenants or obligations contained hereunder are inconsistent with, or less favorable to the Borrower or such Obligor (as the case may be) than the Borrower’s or such Obligor’s rights and obligations under any other document that they are a party to or are otherwise bound by, including without limitation, the Technical Management Agreement, notwithstanding that the Lender Creditors are aware of or have been provided with such other document pursuant to this Agreement or otherwise.

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11.09GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.  (a)  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE COLLATERAL VESSEL MORTGAGES AND OTHER SECURITY DOCUMENTS, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS.  EACH OF THE PARTIES TO THIS AGREEMENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH ON SCHEDULE VII HERETO, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OBLIGOR IN ANY OTHER JURISDICTION.  THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS, AUTHORIZES AND EMPOWERS KRAMER LEVIN NAFTALIS & FRANKEL LLP, WITH OFFICES CURRENTLY LOCATED AT 1177 AVENUE OF AMERICAS, NEW YORK, NEW YORK 10036, ATTENTION:  DAVID J. FISHER, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT; PROVIDED THAT ANY FAILURE ON THE PART OF THE BORROWER TO COMPLY WITH THE FOREGOING PROVISIONS OF THIS SENTENCE SHALL NOT IN ANY WAY PREJUDICE OR LIMIT THE SERVICE OF PROCESS OR SUMMONS IN ANY OTHER MANNER DESCRIBED ABOVE IN THIS SECTION 11.09 OR OTHERWISE PERMITTED BY LAW.
(b)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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(c)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.10Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original (including if delivered by e-mail or facsimile transmission), but all of which shall together constitute one and the same instrument.  A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. This Agreement and the other Credit Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
11.11[Reserved].
11.12Headings Descriptive.  The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
11.13Amendment or Waiver; etc.  (a)  Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Obligors party thereto and the Required Lenders; provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (or in the case of clauses (i), (iv), (v), (viii) and (ix) below, each Lender (other than a Defaulting Lender) of each Class directly and negatively affected thereby),
(i)(A) Extend the timing for or reduce (x) the final scheduled maturity of any Loan or Note or (y) any Scheduled Repayment, (B) reduce the Applicable Margin or the rate or reduce or extend the time of payment of interest on any Loan or any Note or Commitment Commission (except in connection with the waiver of applicability of any post-default increase in Interest Rates) or (C) reduce the principal amount of any Loan or any Note (except to the extent repaid in cash).
(ii)release or amend to limit the nature or scope of any of the Collateral (except as expressly provided in the Credit Documents),
(iii)increase or extend any Lender’s Commitments,
(iv)amend, modify or waive any provision of this Section 11.13 or of any other Section that expressly requires the consent of all the Lenders to do so,
(v)reduce the percentage specified in the definition of Required Lenders or otherwise amend the definition of Required Lenders or Required Delayed Draw Term Loan Lenders,
(vi)consent to the assignment or transfer by the Borrower or any Subsidiary Guarantor of any of its respective rights and obligations under this Agreement,

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(vii)substitute or replace the Borrower or any Subsidiary Guarantor or release any Subsidiary Guarantor from the Guaranty,
(viii)amend, modify or waive Section 2.05 or Section 4.05 or amend, modify or waive any other provision in this Agreement to the extent providing for payments or prepayments of the Loans to be applied pro rata among the Lenders entitled to such payments or prepayments of the Loans (it being understood that the waiver of any mandatory prepayment of the Loans by the Required Lenders shall not constitute an amendment, modification or waiver for purposes of this clause (viii)), or
(ix)amend, modify or waive the conditions to the Borrowing of Delayed Draw Term Loans or amend, modify or waive or extend the Delayed Draw Termination Date without the consent of the Required Delayed Draw Term Loan Lenders;
provided, further, that no such change, waiver, discharge or termination shall (A) increase or extend the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of Section 2.01(b), conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Commitments shall not result in an increase of the Commitments of any Lender, and that an increase in the available portion of any Commitments of any Lender shall not result in an increase in the Commitments of such Lender), (B) without the consent of each Agent, amend, modify or waive any provision of Section 10 as same applies to such Agent or any other provision as same relates to the rights or obligations of such Agent or (C) without the consent of the Security Agent, amend, modify or waive any provision relating to the rights or obligations of the Security Agent.
(b)If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by clauses (i) through (vi), inclusive, of the first proviso to Section 11.13(a), the consent of the Required Lenders or the Required Delayed Draw Term Loan Lenders, as applicable, is obtained but the consent of one or more of such other Lenders whose consent is required (any such Lender, a “Non-Consenting Lender”) is not obtained, then the Borrower shall have the right, so long as all Non-Consenting Lenders whose individual consent is required are treated as described in either clauses (i) or (ii) below, to either (i) replace each such Non-Consenting Lender (or, at the option of the Borrower if the respective Non-Consenting Lender’s consent is required with respect to less than the share of such Loan (or related Commitments) of such Non-Consenting Lender, to replace only the respective Commitments and/or the share of such Loans of the respective Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s individual consent) with one or more Replacement Lenders pursuant to Section 2.11 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination or (ii) terminate such Non-Consenting Lender’s Commitment (if such Non-Consenting Lender’s consent is required as a result of its Commitment), and/or repay the outstanding amount of such Loan and terminate any outstanding Commitments of such Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s consent, in accordance with Section 4.01(a); provided that, unless the Commitments that are terminated and/or the portion of such Loan that is repaid pursuant to preceding clause (ii) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or the outstanding amount of the applicable Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding clause (ii) the Required Lenders or the Required Delayed Draw Term Loan Lenders, as applicable (determined before giving effect to the proposed action), shall specifically consent thereto; provided, further, that in any event the Borrower shall not have the right to replace a Lender, terminate such Lender’s Commitment or repay such Lender’s share of such Loan solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second

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proviso to Section 11.13(a); provided, further, that such Replacement Lender shall be a bank or financial institution.
(c)The Administrative Agent and the Borrower may amend any Credit Document to correct administrative errors or omissions, or to effect administrative changes that are not adverse to any Lender.  Notwithstanding anything to the contrary contained herein, such amendment shall become effective without any further consent of any other party to such Credit Document.
(d)Notwithstanding any other provision in this Section 11.13, an amendment or waiver which relates to the rights or obligations of the Administrative Agent may not be effected without the consent of the Administrative Agent.
11.14Survival.  All indemnities set forth herein including, without limitation, in Sections 2.08, 2.09, 4.04, 11.01 and 11.06 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Loans.
11.15Domicile of the Loans.  Each Lender may transfer and carry its pro rata portion of the Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender.  Notwithstanding anything to the contrary contained herein, to the extent that a transfer of the Loans pursuant to this Section 11.15 would, at the time of such transfer, result in increased costs under Section 2.08, 2.09 or 4.04 from those being charged by the respective Lender prior to such transfer, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective transfer).
11.16Confidentiality.  (a)  Subject to the provisions of clause (b) of this Section 11.16, each Lender agrees that it will not disclose without the prior consent of the Borrower (other than to its officers, directors, employees, auditors, advisors or counsel or to another Lender if the Lender or such Lender’s holding or parent company or board of trustees in its sole discretion determines that any such party should have access to such information; provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender) any information with respect to the Borrower or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document; provided that any Lender may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 11.16(a) by the respective Lender, (ii) as may be required or requested by any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or requested in respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or the Security Agent, (vi) to any auditor or professional financial or legal advisor of such Lender employed in the normal course of its business, (vii) to any branch, Affiliate or Subsidiary of such Lender or to the parent company, head office or regional office of such Lender in connection with the transactions contemplated herein, (viii) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender and any direct, indirect, actual or prospective counterparty (and its advisor) to any swap, derivative, credit insurance or securitization transaction related to the Borrower and its obligations under this Agreement; provided that such prospective transferee or counterparty expressly agrees to execute and does execute (including by way of customary “click through” arrangements) a confidentiality agreement and be bound by the confidentiality provisions contained in this Section 11.16, (ix) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit

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Document or the enforcement of rights hereunder or thereunder or (x) to the extent such information (a) becomes publicly available other than as a result of a breach of this Section, or (b) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Credit Documents, and the Commitments.
(b)The Borrower hereby acknowledges and agrees that each Lender may share with any of its affiliates any information related to the Borrower or any of its Subsidiaries (including, without limitation, any nonpublic customer information regarding the creditworthiness of the Borrower or its Subsidiaries); provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender.
11.17Register.  The Borrower hereby designates the Administrative Agent to serve as the Borrower’s agent, solely for purposes of this Section 11.17, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, any Loan made by each of the Lenders and each repayment and prepayment in respect of the principal amount of the Loans of each Lender.  Failure to make any such recordation, or any error in such recordation shall not affect the Borrower’s obligations in respect of the Loans.  With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, the Loans made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments and the Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and the Loans shall remain owing to the transferor.  The registration of assignment or transfer of all or part of any Commitments and the Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 11.04(b).  Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of the Loans, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the applicable Note evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender.  The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 11.17, except to the extent caused by the Administrative Agent’s own gross negligence, willful misconduct or unlawful acts.
11.18Judgment Currency.  If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from the Borrower hereunder or under any of the Notes in the currency expressed to be payable herein or under the Notes (the “Specified Currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the Specified Currency with such other currency at the Administrative Agent’s New York office on the Business Day preceding that on which final judgment is given.  The obligations of the Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder or under any Note shall, notwithstanding any judgment in a currency other than the Specified Currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in

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such other currency, such Lender or the Administrative Agent (as the case may be) may in accordance with normal banking procedures purchase the Specified Currency with such other currency; if the amount of the Specified Currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the Specified Currency, the Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the Specified Currency so purchased exceeds the sum originally due to any Lender or the Administrative Agent, as the case may be, in the Specified Currency, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the Borrower.
11.19Language.  All correspondence, including, without limitation, all notices, reports and/or certificates, delivered by any Obligor to the Administrative Agent, the Security Agent or any Lender shall, unless otherwise agreed by the respective recipients thereof, be submitted in the English language or, to the extent the original of such document is not in the English language, such document shall be delivered with a certified English translation thereof.
11.20Waiver of Immunity.  The Borrower, in respect of itself, each other Obligor, its and their process agents, and its and their properties and revenues, hereby irrevocably agrees that, to the extent that the Borrower, any other Obligor or any of its or their properties has or may hereafter acquire any right of immunity from any legal proceedings, whether in the United States, any Acceptable Flag Jurisdiction or elsewhere, to enforce or collect upon the Credit Document Obligations of the Borrower or any other Obligor related to or arising from the transactions contemplated by any of the Credit Documents, including, without limitation, immunity from service of process, immunity from jurisdiction or judgment of any court or tribunal, immunity from execution of a judgment, and immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, the Borrower, for itself and on behalf of the other Obligors, hereby expressly waives, to the fullest extent permissible under applicable law, any such immunity, and agrees not to assert any such right or claim in any such proceeding, whether in the United States, any Acceptable Flag Jurisdiction or elsewhere.
11.21USA PATRIOT Act Notice.  Each Lender hereby notifies each Obligor that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub.: 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is required to obtain, verify, and record information that identifies each Obligor, which information includes the name of each Obligor and other “know your customer” information that will allow such Lender to identify each Obligor in accordance with the PATRIOT Act and anti-money laundering rules and regulations, and each Obligor agrees to provide such information from time to time to any Lender.
11.22Severability.  If any provisions of this Agreement or the other Credit Documents is held to be illegal, invalid or unenforceable: (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Credit Documents shall not be affected or impaired thereby and (b) the parties hereto shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions; provided that the Lenders shall charge no fee in connection with any such amendment.  The invalidity of a provision in a particular jurisdiction shall not invalid or render unenforceable such provision in any other jurisdiction.
11.23Flag Jurisdiction Transfer.  In the event that the Borrower desires to implement a Flag Jurisdiction Transfer with respect to a Collateral Vessel, upon receipt of reasonable advance notice thereof from the Borrower, the Security Agent shall use commercially reasonably

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efforts to provide, or (as necessary) procure the provision of, all such reasonable assistance as any Obligor may request from time to time in relation to (i) the Flag Jurisdiction Transfer, (ii) the related deregistration of the relevant Collateral Vessel from its previous flag jurisdiction and (iii) the release and discharge of the related Security Documents; provided that the relevant Obligor shall pay all documented out of pocket costs and expenses reasonably incurred by the Security Agent in connection with provision of such assistance.  Each Lender hereby consents in connection with any Flag Jurisdiction Transfer and subject to the satisfaction of the requirements thereof to be satisfied by the relevant Obligor, to (x) deregister such Collateral Vessel from its previous flag jurisdiction and (y) release and hereby direct the Security Agent to release the relevant Collateral Vessel Mortgage.  Each Lender hereby directs the Security Agent, and the Security Agent agrees to execute and deliver or, at the Borrower’s expense, file such documents and perform other actions reasonably necessary to release the relevant Collateral Vessel Mortgages when and as directed pursuant to this Section 11.23.
11.24Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)the effects of any Bail-In Action on any such liability, including, if applicable:
(i)a reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or
(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
11.25German Resident Secured Creditor. To the extent a Lender Creditor is resident in Germany (“Inländer”) within the meaning of Section 2 Paragraph 15 of the German foreign trade and payment act (AWG Außenwirtschaftsgesetz) and therefore subject to Section 7 of the AWV or is subject to EU Regulation 2271/1996 and it would not be permitted to accept a representation or an undertaking that is made or is to be made or is granted or is to be granted by an Obligor with respect to Sanctions Laws under this Agreement, such Lender Creditor shall not, in the event of a breach by an Obligor of any such representation or undertaking be entitled to invoke or declare an Event of Default or vote for a cancellation of the Total Commitments and immediate repayment of the Loans pursuant to Section 9.
(b)The representations in Section 6.26 given by, and the undertakings in Sections 7.05, 7.15 and 7.19 of, any Obligor to any Lender Creditor resident in Germany (“Inländer”) within the meaning of Section 2 Para. 15 of the AWV are granted only to the extent that such Lender Creditor itself

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would be permitted to receive such representations or undertakings pursuant to Section 7 of the AWV or to EU Regulation 2271/1996.
(c)On any matter referred to in paragraph (a) above in respect of which the Lenders are to vote but in respect of which a German-resident Lender to whom paragraph (a) above applies shall not vote in accordance with such paragraph:
(i)for the purposes of determining whether approval of the Required Lenders is obtained the references in the definition of “Required Lenders” to 66⅔ per cent. of the Commitments of Non-Defaulting Lenders and to 66⅔ per cent. of such Loan of Non-Defaulting Lenders shall for this purpose be construed to refer to 66⅔ per cent. of such Commitments or, as the case may be, such amount of such Loan only taking account of the other Commitments of, or as the case may be, the participation in such Loan of, the Non-Defaulting Lenders and other than the Commitments of or, as the case may be, the participation in such Loan of, the German-resident Lender; and an action taken by the Required Lenders as such definition is modified by this paragraph (c) shall be valid in the applicable circumstances and binding all parties hereto; and
(ii)for the purposes of determining whether the approval of all Lenders is obtained, all Lenders shall be construed to mean the other Lenders other than the German-resident Lender and an action taken by all Lenders as modified by this paragraph (c) shall be valid in the applicable circumstances and binding on all parties hereto.
11.26Amendment and Restatement.  On the Restatement Effective Date, the Original Credit Agreement shall be amended and restated in its entirety and governed by the terms of this Agreement, all as more particularly described herein; provided that the provisions of the Original Credit Agreement which are expressly stated to survive the termination of the Original Credit Agreement shall survive and remain in full force and effect. The parties acknowledge and agree that this Agreement and the other Credit Documents do not constitute a novation, payment and reborrowing or termination of the obligation under the Original Credit Agreement, and that all such obligations are in all respects continued and outstanding as obligations under this Agreement or provided in the Restatement Agreement except to the extent such obligation are modified from and after the Restatement Effective Date, as provided in this Agreement and the other Credit Documents. From and after the Restatement Effective Date, the Obligations under, and as defined in, the Original Credit Agreement are and shall continue as Obligations under this Agreement and the Credit Documents until otherwise paid in accordance with the terms hereof. Without limiting the generality of the foregoing, the Security Documents and the grant of liens on all of the Collateral (as each such term is defined in the Original Credit Agreement), do and shall continue to secure the payment of all Obligations of the Obligors under Credit Documents, in each case, as amended by this Agreement.
***
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Exhibit 10.60
EXECUTION VERSION
GENCO SHIPPING & TRADING LIMITED
299 Park Avenue, 12th Floor
New York, New York 10171
January 18, 2021
Nordea Bank ABP, New York Branch,
as Administrative Agent and as Security Agent
1211 Avenue of the Americas, 23rd Floor,
New York, New York 10036
Attention: Shipping, Offshore and Oil Services
and
Lenders party to the
Credit Agreement referred to below
Re: Letter Amendment
Ladies and Gentlemen:
Reference is made to the Amended and Restated  Credit Agreement, dated as of February 28, 2019 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among Genco Shipping & Trading Limited, a company incorporated under the laws of the Republic of the Marshall Islands (“Borrower”), Nordea Bank ABP, New York Branch, as administrative agent (in such capacity, “Administrative Agent”) and as security agent (in such capacity, “Security Agent”), and the lenders from time to time a party thereto (“Lenders”).  Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Credit Agreement.
Borrower has requested, and the Administrative Agent and the Required Lenders have agreed, to amend certain provisions of the Credit Agreement as herein provided to reflect and clarify the current status of the Specified Exchange Transactions and the Vessel Exchange MOAs entered into in connection therewith.
The definition of “Vessel Exchange MOA” appearing in Section 1.01 of the Credit Agreement is therefore hereby amended and restated as follows:
““Vessel Exchange MOA” means each of the following:
(i)the memorandum of agreement, dated December 17, 2020 by and among TR Prince Shipping Ltd, as Sellers and Genco Freedom Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (i) of the definition thereof and the Collateral Vessels Genco Avra and Genco Mare, together with the associated memorandums of agreement relating to the disposition of such Collateral Vessels as contemplated thereby;
(ii)the memorandum of agreement, dated December 17, 2020 by and among TR Princess Shipping Ltd, as Sellers and Genco Vigilant Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (ii) of the definition thereof and the

Collateral Vessels Baltic Cove and Baltic Fox, together with the associated memorandums of agreement relating to the disposition of such Collateral Vessels as contemplated thereby;
(iii)the memorandum of agreement, dated December 17, 2020 by and among TR Niklas Shipping Ltd, as Sellers and Genco Magic Limited as Buyers, with respect to the purchase of the New Exchange Vessel described in clause (iii) of the definition thereof and the Collateral Vessels Genco Ocean and Genco Spirit, together with the associated memorandums of agreement relating to the disposition of such Collateral Vessels as contemplated thereby;
in each case, as amended, restated, amended and restated, supplemented and/or modified from time to time; provided that only the Specified Exchange Collateral Vessels and the New Exchange Vessels (and, for the avoidance of doubt, no other Collateral Vessel) may be the subject of the Vessel Exchange MOAs.”
This letter agreement is limited precisely as written and shall not be deemed a waiver of or consent to the modification of or deviation from any other term or condition of the Credit Agreement and the other Credit Documents or any of the other instruments or agreements referred to therein except as set forth herein, or prejudice any right or rights which any of the Lenders or the Administrative Agent now have or may have in the future or in connection with the Credit Agreement, as amended hereby, the other Credit Documents or any of the other instruments or agreements referred therein. This letter agreement may be executed by the Administrative Agent on behalf of the Required Lenders and in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Administrative Agent.  This letter agreement and the rights and obligations of the parties hereto shall be construed in accordance with and governed by the laws of the State of New York.
This letter agreement shall become effective when the Borrower and the Administrative Agent (on behalf of the Lenders constituting Required Lenders) shall have signed a counterpart hereof (whether the same or different counterparts). This letter agreement may be delivered by facsimile or other electronic transmission. This letter agreement shall constitute a Credit Document. From and after the effective date hereof, all references in the Credit Agreement and the other Credit Documents to the Credit Agreement shall be deemed references to the Credit Agreement as modified hereby.
[Signatures on Following Pages]

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	Very truly yours,	
		
	GENCO SHIPPING & TRADING LIMITED,
as Borrower	

	By:	/s/ Apostolos Zafolias	
	Name:	Apostolos Zafolias	
	Title:	Chief Financial Officer	

	AGREED AND ACKNOWLEDGED FOR AND
ON BEHALF OF THE REQUIRED LENDERS:	

	NORDEA BANK ABP, NEW YORK BRANCH,
as Administrative Agent and Security Agent	

	By:		/s/ Oddbjørn Warpe	
		Name:	Oddbjørn Warpe	
		Title:	Executive Director	
			
	By:		/s/ Martin Lunder	
		Name:	Martin Lunder	
		Title:	Managing Director	

Exhibit 21.1

Subsidiaries of the Company

The following is a list of the Company’s significant subsidiaries as of February 24, 2021,

Name of Significant Subsidiary	    	Jurisdiction of
Incorporation	    	Portion of
Ownership
Interest	 	
						
Genco Progress Limited		Marshall Islands		100 	%	
Genco Ship Management LLC		Delaware		100 	%	
Genco Muse Limited		Marshall Islands		100 	%	
Genco Investments LLC		Marshall Islands		100 	%	
Genco Augustus Limited		Marshall Islands		100 	%	
Genco Tiberius Limited		Marshall Islands		100 	%	
Genco London Limited		Marshall Islands		100 	%	
Genco Titus Limited		Marshall Islands		100 	%	
Genco Constantine Limited		Marshall Islands		100 	%	
Genco Hadrian Limited		Marshall Islands		100 	%	
Genco Commodus Limited		Marshall Islands		100 	%	
Genco Maximus Limited		Marshall Islands		100 	%	
Genco Claudius Limited		Marshall Islands		100 	%	
Genco Predator Limited		Marshall Islands		100 	%	
Genco Warrior Limited		Marshall Islands		100 	%	
Genco Hunter Limited		Marshall Islands		100 	%	
Genco Charger Limited		Marshall Islands		100 	%	
Genco Champion Limited		Marshall Islands		100 	%	
Genco Cavalier LLC		Marshall Islands		100 	%	
Genco Raptor LLC		Marshall Islands		100 	%	
Genco Thunder LLC		Marshall Islands		100 	%	
Genco Bay Limited		Marshall Islands		100 	%	
Genco Ocean Limited		Marshall Islands		100 	%	
Genco Avra Limited		Marshall Islands		100 	%	
Genco Mare Limited		Marshall Islands		100 	%	
Genco Spirit Limited		Marshall Islands		100 	%	
Genco Aquitaine Limited		Marshall Islands		100 	%	
Genco Ardennes Limited		Marshall Islands		100 	%	
Genco Auvergne Limited		Marshall Islands		100 	%	
Genco Bourgogne Limited		Marshall Islands		100 	%	
Genco Brittany Limited		Marshall Islands		100 	%	
Genco Languedoc Limited		Marshall Islands		100 	%	
Genco Loire Limited		Marshall Islands		100 	%	
Genco Lorraine Limited		Marshall Islands		100 	%	
Genco Normandy Limited		Marshall Islands		100 	%	
Genco Picardy Limited		Marshall Islands		100 	%	
Genco Provence Limited		Marshall Islands		100 	%	
Genco Pyrenees Limited		Marshall Islands		100 	%	
Genco RE Investments LLC		Marshall Islands		100 	%	
Genco Rhone Limited		Marshall Islands		100 	%	
Genco Defender Limited		Marshall Islands		100 	%	
Genco Liberty Limited		Marshall Islands		100 	%	
Genco Columbia Limited		Marshall Islands		100 	%	
Genco Endeavour Limited		Marshall Islands		100 	%	
Genco Resolute Limited		Marshall Islands		100 	%	
Genco Weatherly Limited		Marshall Islands		100 	%	
Genco Freedom Limited		Marshall Islands		100 	%	
Genco Magic Limited		Marshall Islands		100 	%	
Genco Vigilant Limited		Marshall Islands		100 	%	

						
Name of Significant Subsidiary	    	Jurisdiction of
Incorporation	    	Portion of
Ownership
Interest	 	
						
Genco Holdings Limited		Marshall Islands		100 	%	
Genco Shipping Pte. Limited		Singapore		100 	%	
Genco Shipping A/S		Denmark		100 	%	
Baltic Trading Limited		Marshall Islands		100 	%	
Baltic Bear Limited		Marshall Islands		100 	%	
Baltic Breeze Limited		Marshall Islands		100 	%	
Baltic Cougar Limited		Marshall Islands		100 	%	
Baltic Cove Limited		Marshall Islands		100 	%	
Baltic Fox Limited		Marshall Islands		100 	%	
Baltic Hare Limited		Marshall Islands		100 	%	
Baltic Hornet Limited		Marshall Islands		100 	%	
Baltic Jaguar Limited		Marshall Islands		100 	%	
Baltic Leopard Limited		Marshall Islands		100 	%	
Baltic Lion Limited		Marshall Islands		100 	%	
Baltic Mantis Limited		Marshall Islands		100 	%	
Baltic Panther Limited		Marshall Islands		100 	%	
Baltic Scorpion Limited		Marshall Islands		100 	%	
Baltic Tiger Limited		Marshall Islands		100 	%	
Baltic Wasp Limited		Marshall Islands		100 	%	
Baltic Wind Limited		Marshall Islands		100 	%	
Baltic Wolf Limited		Marshall Islands		100 	%	

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-226016, 333-215438, and 333-206023 on Form S-3, and Registration Statement Nos. 333-218042, 333-205641 and 333-197923 on Form S-8 of our reports dated February 24, 2021, relating to the financial statements of Genco Shipping & Trading Limited and subsidiaries, and the effectiveness of Genco Shipping & Trading Limited and subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of Genco Shipping & Trading Limited for the year ended December 31, 2020.

		
/s/ Deloitte & Touche LLP		
New York, New York
February 24, 2021

Exhibit 31.1

CERTIFICATION

I, John C. Wobensmith, certify that:

1.        I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2020 of Genco Shipping & Trading Limited;

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.        Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.        The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		/s/ John C. Wobensmith	
		Name:    John C. Wobensmith	
Date:    February 24, 2021	Title:      Chief Executive Officer and President	

Exhibit 31.2

CERTIFICATION

I, Apostolos Zafolias, certify that:

1.        I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2020 of Genco Shipping & Trading Limited;

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.        Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.        The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.        The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		/s/ Apostolos Zafolias	
		Name:     Apostolos Zafolias	
Date:    February 24, 2021	Title:       Chief Financial Officer	

Exhibit 32.1

Chief Executive Officer Certification

In connection with Genco Shipping & Trading Limited’s (the “Company”) Annual Report of on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and President of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 24, 2021	/s/ John C. Wobensmith	
		Name:    John C. Wobensmith	
		Title:      Chief Executive Officer and President	

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Chief Financial Officer Certification

In connection with Genco Shipping & Trading Limited’s (the “Company”) Annual Report of on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  February 24, 2021	/s/ Apostolos Zafolias	
		Name:     Apostolos Zafolias	
		Title:       Chief Financial Officer	

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.